LIN Broadcasting Corp looks to have escaped the clutches of British Telecommunications Plc’s US cellular partner McCaw Cellular Communications Inc, Kirkland, Washington, yesterday announcing that it had found a white knight in the shape of Atlanta-based BellSouth Corp. The two announced definitive agreement yesterday to merge their US cellular telephone interests, creating a combined company that currently serves some 500,000 customers in more than 40 markets – with LIN effectively taking over BellSouth’s cellular arm rather than the other way round. In return for its own substantial cellular operations, BellSouth will get new sharees representing 50% of LIN’s expanded equity, making the company proof against a hostile bid; in addition, LIN preference shares may be issued to BellSouth to the extent that net tangible assets of BellSouth transferred to the combined company exceed those contributed by LIN by more than a specified amount. Before the merger, LIN will spin off its television broadcasting subsidiaries to shareholders and also intends to pay each pre-merger shareholder $20 a share as a special cash dividend. Donald Pels, currently chairman, president and chief executive of LIN, will hold the same posts in the combined cellular company. The combined company will serve markets with populations currently totalling 62m – BellSouth grew big in cellular services by buying Mobile Communications Corp of Amer ica for what was a bargain $710m by the time the acquisition was completed earlier this year. The new firm will seek to ex pand further by dRBnchises in other markets; completion is expected by year-end.
