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P. M. BRIEFING : BellSouth to Drop Agreement to Merge With LIN Broadcasting

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<i> From Times Wire Services</i>

BellSouth Corp. said today that it will drop its agreement to merge with LIN Broadcasting Corp., which is pursuing another combination with McCaw Cellular Communications Inc., under a $66.5-million termination deal.

BellSouth’s offer to terminate the previous agreement also includes a provision for McCaw to contribute $26.5 million to Los Angeles RCC’s Inc., of which BellSouth owns 85% and McCaw 15%. The California company owns an equity interest in Los Angeles Cellular Telephone Co.

BellSouth said the termination fee was part of a previous agreement in which it and New York-based LIN were to merge into a cellular telephone company that would have had 55 million potential customers and dominance in some of the nation’s top markets.

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LIN last week asked BellSouth to terminate the agreement when McCaw made a revised $3.38-billion buyout offer. The LIN board has recommended that its shareholders approve the McCaw deal.

Some analysts said they thought BellSouth would come back with a new offer. But BellSouth Enterprises President William O. McCoy said today the offer, a non-cash proposal made in September, was the best it could do.

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