Hearst Corp., the privately held company that owns the Chronicle and a variety of other publications, has dropped its bid for the 48 percent of Hearst-Argyle Television that it does not already own. Hearst offered $23.50 a share and shareholders want more.

Reed Business Information publications quoted Barry Lucas of the asset management firm Gabelli & Co. as saying “the initial bid was was not fair value as we see it,” and he predicted Hearst-Argyle deserved “another kiss.” Hearst, seeing what the market will bear, can make a new offer whenever it wants.

Jonathan Hemingway of Broadcasting & Cable rerports that Hearst and Belo are going separate ways. While Hearst wants to buy up its television assets, possibly to support its print side, Belo Corp. (owner of the Dallas Morning News) is separating its broadcast and newspaper assets.

Hearst-Argyle bought KCRA Channel 3, the NBC affiliate in Sacramento, from Kelly Broadcasting for $530 million in 1998. KCRA’s copter is shown above. Hearst-Argyle also owns KQCA Channel 58 in Stockton, the MyNetworkTV affiliate that serves the Sacramento market. [Reuters report]