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Hicks tops bids for Pulitzer

Transaction valued at $1.8 bil

Wall Street sources indicated Thursday that Hicks, Muse, Tate & Furst has won the auction for Pulitzer Publishing Co.’s television properties and plans to fold the nine network-affiliated stations into Hicks Muse-controlled Chancellor Media Corp.

Rumors of the impending deal reportedly account for recent declines in Chancellor Media stock, which ended Thursday at $41.50, down considerably from its yearly high of $50.50.

Neither Chancellor Media nor Hearst-Argyle Television, the other front runner in the widely covered auction, could be reached for comment late Thursday.

The transaction is expected to be valued at around $1.8 billion — a price that previously interested parties, such as Clear Channel Communications Inc. and Gannett Co. Inc., presumably deemed prohibitive.

St. Louis-based Pulitzer Publishing announced in late February that it had retained investment firms Goldman Sachs & Co. in New York and Huntleigh Securities in St. Louis to “explore potential strategic alternatives” for its broadcast division. The announcement culminated in Pulitzer receiving final bids for its TV properties this past Wednesday.

Chancellor Media Corp. is the country’s second-largest radio company, with 108 stations in the 22 top markets.

Last month, Chancellor named Jeffrey A. Marcus, a leading cable executive, its new president and CEO. Marcus, who replaced Thomas O. Hicks, had weeks earlier sold Marcus Cable to Paul G. Allen for $2.78 billion.

Hearst-Argyle was also believed to have been a strong contender for the Pulitzer properties, as the 15-station group, itself the result of a merger last August, has publicly committed itself to increasing its national coverage to 20% from its current 11%.

Its acquisition of Pulitzer’s properties, which cover 5.5% of the country, would have taken Hearst-Argyle more than halfway toward this goal.