Hearst stocks up on Argyles; merged TV group with 14 stations, 11.6% coverage is valued at $1.8 billion. (Hearst Corp. acquisition of Argyle Television Inc.)

Merged TV group with 14 stations, 11.6% coverage is valued at $1.8 billion

It's only Hearst Corp.'s second TV station buy in 11 years, but it's a doozy: In acquiring Argyle Television Inc. last week, Hearst doubled its TV station holdings and created a new TV company valued at $1.8 billion.

Argyle's stations themselves are valued at about $525 million, sources say. Hearst effectively paid 3.9 times Argyle's 1996 earnings. Brokers say that multiple sounds high, but fair. "They're good properties," says TV broker Brian Cobb, of Media Venture Partners: "It's a good matchup." But, he notes, the deal gives "new meaning [to the term] 'geographic diversity.'"

Hearst-Argyle Television Inc. will be based in New York and will own 14 TV stations and three satellites. It will operate a 15th under an LMA, for a total TV household reach of 11.6%. The new company's goal is to reach 20% in 3-5 years, says Argyle Chairman Bob Marbut, who will be …