Lin Tells McCaw It Would Deal for $6.1 Billion

Lin Broadcasting said Tuesday that it would agree to be acquired by McCaw Cellular Communications if the big cellular telephone company comes up with a firm offer of at least $6.1 billion by Monday morning.

At the same time, however, Lin Chairman Donald A. Pels said he has “serious doubt” that Kirkland, Wash.-based McCaw is prepared to negotiate a “real deal” at a “fair price.”

“We have reached these conclusions as a result of your stop-and-go tactics and increased and decreased offers for Lin,” Pels said in a letter to McCaw Chairman Craig O. McCaw.

Lin, which holds 35% of Los Angeles Cellular Telephone, said its board would pursue other options if McCaw doesn’t make a $6.1-billion offer, which would amount to $127.50 a share.

McCaw had no immediate comment on Pels’ letter.

Lin has rejected two McCaw offers: the initial $120-a-share, all-cash bid made in June and McCaw’s subsequent $110-a-share offer made after Lin lost a legal battle for the right to acquire valuable cellular properties in New York and Philadelphia. More recently, McCaw agreed to discuss a $127.50-a-share cash and stock offer, but broke off those negotiations on Friday.

When those talks fell apart, Pels said the only substantial difference between the two parties was assurance that the merger would be completed without “unreasonable delay.” McCaw insisted that the offer remain open for 14 months and wouldn’t guarantee prompt pursuit of financing and regulatory approvals to complete the deal, Pels said.

Some analysts said Lin’s management, having rejected two all-cash offers from McCaw, was under pressure to pursue a favorable offer. “They’re feeling the heat from shareholders upset that they had a $120-a-share offer in hand,” said David J. Boczar, an analyst with New Japan Securities in New York.

McCaw’s suspension of talks last week was another effort to make Lin shareholders “irate” at management, Boczar said. “My own feeling is that it may have worked to some extent. McCaw is dealing from a position of strength. They are playing on the emotions of shareholders.”

Lin spokesman Michael Plouf said the company is still considering such options as a spinoff of its seven television stations into a separate company, an acquisition, a joint venture or a recapitalization.