LIN Television Corp. accepted a sweetened offer of $1.9 billion from the Dallas-based investment firm Hicks, Muse, Tate & Furst Inc.
The move comes one day after Raycom Media Inc. had raised its bid for the Providence-based broadcaster to $1.7 billion.
Hicks Muse will pay $55 a share in cash, or about $250 million more than it first bid in August.
Hicks Muse plans to use LIN’s eight stations and management as the foundation for an effort to become one of the nation’s largest station owners.
Many investors had said its original bid of $47.50 a share was low because values for broadcasters have risen with the relaxation of restrictions on station ownership.
LIN shares closed up $1 at $53.13 in Nasdaq trading on Wednesday.
Dallas-based Hicks Muse was able to boost its bid with the help of General Electric Co.'s NBC TV network, which will enter a partnership involving LIN’s Dallas station. The companies declined to say how much NBC will contribute.
AT&T; Corp. will also have a big say in what happens to LIN. Its AT&T; Wireless Services Inc. division owns 45% of the broadcaster and has a deadline next year to either buy the rest or put its stake up for sale. It has said it will support the Hicks Muse deal if a majority of the remaining shareholders approve.
The deal, expected to close in several months, would be the largest purchase yet for Hicks Muse.
Its Sunrise Broadcasting unit owns five TV stations in small markets in Ohio, New York, Pennsylvania, Michigan and California. Sunrise is expected to close soon on purchases of two other stations in Texas, and a company spokesman said it expects to pursue other transactions. Hicks Muse is also one of the largest owners of radio stations.
Closely held Raycom owns about 25 TV stations in middle and small markets. It is financed by Alabama’s state pension fund.