Marathon Partners L.P., with 90,000 shares, urged the Hearst-Argyle board Tuesday to reject Hearst Corp.'s proposed $23.50-per-share price.

"It is absolutely clear that the current offer does not fairly compensate the shareholders of (Hearst-Argyle) for the unique and valuable assets the company controls," Mario Cibelli, the managing member of Marathon, wrote to the board--calling the offer price "unacceptably low."

The H-A assets include management of 29 TV stations (eight in top-25 markets), a stake in Internet Broadcasting and the possibility of future growth through retransmission consent dollars.

A representative for Hearst Corp. declined comment in an e-mail. A representative for Hearst-Argyle could not be reached.

Cibelli also accused Hearst Corp. management of trying to capitalize on Wall Street's recent downturn to nab full ownership of the company at a low price. (It already owns some 73%, and is seeking the rest.)

"From my vantage point, this offer was made at a time when general market weakness created a small window for Hearst Corp.'s paltry offer price to be perceived as fair to the weak-kneed or weak-minded," he wrote.

Hearst Corp. plans to make an offer next month to buy out shareholders for the portion of H-A it doesn't already own for $23.50 a share--a $600 million transaction. But since the announcement, the stock has been trading nearly $2 per share higher, and at least one analyst feels it could command perhaps $28.

The H-A board is controlled by Hearst Corp., but if large institutional shareholders balk at the company's offer, it will be difficult to execute the deal. Marathon's 90,000 shares pale beside the holdings of prominent groups, such as Vanguard Group and Goldman Sachs and others, but suggest that others may join its opposition.

The H-A board Monday said it will consider the offer once the Hearst Corp. bid is officially made, and render a recommendation within 10 days.

In his letter to the board, Cibelli cited recent comments by H-A CEO David Barrett that the company's stock is undervalued; the expected near-tripling of retransmission consent dollars since 2005 and opportunity for more growth over the next three years; the coming benefits from tens of millions invested to bolster digital initiatives; and a boon from a rush of political dollars in 2008 as reasons to reject the Hearst Corp. bid.

"Hearst Corp.'s timely proposal to (H-A) is quite self-serving, as it seeks to usurp the public shareholders' participation in next year's huge political advertising surge," Cibelli wrote.

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