SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
March 7, 1995
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Date of Report
(Date of earliest event reported)
LIN BROADCASTING CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-2481 62-0673800
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(State or other (Commission File No.) I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
5295 Carillon Point
Kirkland, Washington 98033
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(Address of principal executive offices, including zip code)
(206) 828-1902
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On March 7, 1995, LIN Broadcasting Corporation (the
"Company") announced that, as a result of the appraisal process
under the Private Market Value Guarantee (the "PMVG") between the
Company and McCaw Cellular Communications, Inc., the private
market value of the Company has been determined to be $127.50 per
share of the Company's common stock, $.01 par value. This value
is the value determined by Wasserstein Perella & Co., Inc., which
was retained as the third appraiser in accordance with the PMVG.
Additional information regarding this development is
contained in the Press Release issued March 7, 1995 by the
Company and the letter from Wasserstein Perella & Co., Inc.,
dated March 7, 1995, attached hereto as Exhibits 99.1 and 99.2,
respectively.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
99.1 Press Release issued March 7, 1995
99.2 Text of letter dated March 7, 1995 from
Wasserstein Perella & Co., Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
LIN BROADCASTING CORPORATION
By DONALD GUTHRIE
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Donald Guthrie, Senior Vice
President and Chief Financial
Officer
Dated: March 9, 1995
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
99.1 Press Release issued March 7, 1995
99.2 Text of letter dated March 7, 1995 from
Wasserstein Perella & Co., Inc.
Exhibit 99.1
FOR IMMEDIATE RELEASE
NEWS FROM LIN BROADCASTING . . .
THIRD APPRAISER REPORTS PRICE FOR
LIN BROADCASTING CORPORATION
KIRKLAND, WA. -- March 7, 1995 -- LIN Broadcasting
Corporation (NASDAQ: LINB) announced that as a result of the
appraisal process under the Private Market Value Guarantee
Agreement (PMVG) between LIN and McCaw Cellular Communications,
Inc., private market value has been determined to be $127.50 per
share of LIN Common Stock. This value is the value determined by
Wasserstein Perella & Co., Inc. which was retained as the third
appraiser. This followed the findings by the appraisers retained
by AT&T, Morgan Stanley & Co., Incorporated, and the Independent
Directors of LIN, Bear, Stearns & Co. Inc. and Lehman Brothers
Inc. that the private market value was $105 and $155 per share,
respectively. McCaw Cellular is a wholly-owned subsidiary of AT&T
Corp.
The Committee of Independent Directors of LIN stated that it
is disappointed with the price arrived at in the PMVG process and
is reviewing its options.
Under the PMVG, AT&T will have until April 21, 1995 to
decide whether or not to acquire the 48% of the LIN Common Stock
it does not already own at the private market price per share.
Any sale to AT&T is subject to the approval of the LIN
shareholders, other than AT&T.
If AT&T decides not to proceed with an acquisition, the PMVG
provides that all of LIN (including the 52% of the shares owned
by AT&T) will be put up for sale under the direction of the
Independent Directors of LIN, with the assistance of their
independent financial advisors, Bear, Stearns & Co. Inc. and
Lehman Brothers Inc. and counsel. AT&T and McCaw Cellular are
required by the PMVG to fully cooperate with the independent
directors in the sale of LIN. By the terms of the PMVG, the
Independent Directors may sell to any buyer or combination of
buyers and may specifically exclude AT&T and McCaw as eligible
buyers. Any sale to AT&T or any other buyer or buyers will be
subject to the approval of the LIN shareholders, other than AT&T.
The text of the letter from Wasserstein Perella & Co., Inc.
setting forth their determination of the private market value is
being concurrently released.
LIN is engaged in the business of providing cellular voice
telephone and data services in the metropolitan areas of New
York City (including Long Island and the northern New Jersey),
Los Angeles, Dallas-Ft. Worth and Houston.
Contacts: Don Guthrie, SVP-Finance, LIN Broadcasting
Corporation, 206/828-1902
Lisa LaMagna, Abernathy/MacGregor/Scanlon,
212/371-5999
EXHIBIT 99.2
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, New York 10019-6163
Telephone: 212-969-2700
Fax: 212-969-2629
March 7, 1995
McCaw Cellular Communications, Inc.
5400 Carillon Point
Kirkland, Washington 98033
Independent Directors
LIN Broadcasting Corporation
5295 Carillon Point
Kirkland, Washington 98033
Dear Ladies and Gentlemen:
We have been designated by you as the "Mutually
Designated Appraiser" to resolve the dispute concerning, and
determine, the private market value per share of the Common
Stock, par value $0.01 per share (the "Shares"), of LIN
Broadcasting Corporation ("LIN"), pursuant to Section 2(C) of the
Private Market Value Guarantee dated December 11, 1989 (the
"PMVG"), between McCaw Cellular Communications, Inc. ("McCaw")
and LIN.
As detailed below, in arriving at our determination of
private market value per Share, we have applied the definition of
private market value per Share contained in Section 2(B) of the
PMVG, consistent with the interpretations of our counsel, Paul,
Weiss, Rifkind, Wharton & Garrison ("Paul, Weiss"), and have,
upon the advice of Paul, Weiss, among other things, not
considered McCaw and its parent AT&T Corp. ("AT&T") to be
potential buyers of the outstanding Shares under such definition
but rather have considered them to be sellers of their Shares and
also have considered the tax, accounting and regulatory
consequences thereof.
In our analysis of various legal, regulatory,
accounting and tax issues related to possible transaction
structures or potential acquirors or forms of consideration, we
took account of regulatory restrictions applicable to AT&T and
the effect of LIN'S status as a majority owned subsidiary of
another corporation on the feasibility of tax free transactions
and the method of accounting for an acquisition of LIN.<PAGE>
<PAGE> 2
Section 2(B) of the PMVG defines "private market value
per Share" as:
"the private market price per Share (including control
premium) that an unrelated third party would pay if it
were to acquire all outstanding Shares (including the
Shares held by [McCaw] and its affiliates) in an arm's-
length transaction, assuming [LIN] was being sold in a
manner designed to attract all possible participants
(including the Regional Bell Operating Companies) and
to maximize stockholder value, including if necessary
through the sale or other disposition (including tax-free
spin-offs, if possible) of businesses prohibited
by legal restrictions to be owned by any particular
buyer or class of buyers (e.g., the Regional Bell
Operating Companies)."
We understand that Morgan Stanley & Co., Incorporated
(the "Offeror's Appraiser") was designated by McCaw as the
appraiser to determine the private market value per Share
pursuant to Section 2(C) of the PMVG and that the Offeror's
Appraiser determined the private market value per Share to be
$lO5. We understand that Lehman Brothers and Bear Stearns & Co.,
Inc. (the "Independent Directors' Appraisers") were designated by
the Independent Directors of LIN as the appraisers to determine
the private market value per Share pursuant to Section 2(C) of
the PMVG and that the Independent Directors' Appraisers
determined the private market value per Share to be $155.
We have been advised that counsel for McCaw and counsel
for the Independent Directors of LIN disagree as to whether, in
determining the private market value per Share as defined in
Section 2(B) of the PMVG, McCaw and AT&T should be considered as
potential buyers of the outstanding Shares. We have also been
advised that counsel for McCaw and counsel for the Independent
Directors of LIN disagree as to the conditions under which, in
determining the private market value per Share as defined in
Section 2(B) of the PMVG, it should be assumed that McCaw and the
public stockholders of LIN must receive and be entitled to retain
the same form of consideration from any potential buyer or buyers
of LIN or any portion of its business or assets.
At the request of counsel for McCaw and counsel for the
Independent Directors of LIN, we have consulted with Paul, Weiss
concerning the requirements of Section 2(B) of the PMVG and have
applied their interpretations in arriving at our determination cf
private market value per Share set forth below. With respect to
the matters described in the preceding paragraph, such counsel
have advised us that, in their opinion, (i) in determining the<PAGE>
<PAGE> 3
private market value per Share under the PMVG, we should not
consider McCaw or AT&T to be potential buyers of all of the
outstanding Shares, and should consider them to be sellers of the
Shares owned by McCaw and consider the tax, accounting and
regulatory consequences thereof; (ii) although we should not
include McCaw or AT&T in the analysis of what an unrelated third
party would pay, we may consider other transactions involving
McCaw and AT&T, such as AT&T's acquisition of McCaw, in a
comparable acquisition analysis, and give such other transactions
whatever weight we deem appropriate in our judgment; (iii) we may
take into account potential transactions in which McCaw or AT&T
would receive consideration equal in value but different in kind
from that to be received by the holders of the Public Shares (as
the term "Public Shares" is defined in the PMVG), and (iv) the
PMVG should be construed as requiring consideration of
transactions designed to overcome the legal barriers resulting
from AT&T's indirect ownership of the Shares, provided that the
kinds of transactions to be so considered are those in which such
legal barriers can reasonably be overcome, and in which AT&T
receives value per Share equal to the value received by the
holders of the Public Shares.
We have been advised by counsel for McCaw and counsel
for the Independent Directors of LIN that the Modification of
Final Judgement entered by the United States District Court for
the District of Columbia in United States v. American Telephone &
Telegraph Co., 552 F. Supp. 131 (D.D.C., 1982), relating to the
divestiture by AT&T of the Regional Bell Operating Companies
prohibits AT&T and its affiliates, including McCaw, from holding
stock issued by a Regional Bell Operating Company and that any
waiver of this prohibition would require the divestiture by McCaw
of any such stock within a relatively short period of time and,
in any event, within one year. As described above, in
determining the private market value per Share we have taken into
account, among other matters, these restrictions on AT&T's
ownership of certain securities. We also took into account,
among other matters, the unavailability of pooling of interests
accounting for a disposition by a parent of its subsidiary.
In arriving at our determination of the private market
value per Share, we have reviewed, among other things:
(i) the PMVG;
(ii) the reports and other materials (the "Other
Appraisers' Reports") prepared and delivered to us by
the Offeror's Appraiser and the Independent Directors'
Appraisers relating to their determinations of the
private market value per Share pursuant to Section 2(C)
of the PMVG; <PAGE>
<PAGE> 4
(iii) certain publicly available information with
respect to LIN, including the publicly available
consolidated financial statements of LIN for recent
years and interim periods to date;
(iv) certain internal financial and operating
information, including certain projections of financial
performance, relating to LIN, its principal operating
subsidiaries and certain entities in which LIN or its
subsidiaries hold partnership interests prepared by
each of the management of LIN and the management of
McCaw;
(v) certain publicly available information
concerning the public trading prices of the Shares and
the stock of certain other companies in businesses
similar to LIN; and
(vi) certain publicly available information
concerning merger and acquisition transactions
involving McCaw, LIN and certain other companies in
businesses similar to LIN.
In addition, we have had discussions with the
managements of LIN and McCaw and representatives of the Offeror's
Appraiser and the Independent Directors' Appraisers concerning
(i) the businesses, operations, assets, financial condition and
future prospects of LIN and its subsidiaries and (ii) the Other
Appraisers' Reports.
In accordance with the terms of our letter agreement
dated February 17, 1995, with you (the "Engagement Letter"), we
have not been provided with any internal nonpublic information
prepared by McCaw or AT&T relating to the operations or assets of
McCaw or AT&T or (except for the projections prepared by the
management of McCaw referred to above) LIN, or any valuations of
LIN prepared by LIN, McCaw or AT&T or their financial advisors
other than those contained in the Other Appraisers' Reports. As
instructed by you, we have not solicited any third parties
regarding their interest in acquiring LIN or any of its business
or assets, and you have advised us that, except for certain
general inquiries that did not include any indication of price,
none of LIN, McCaw and AT&T and their respective advisors have
solicited or received any proposals or expressions of interest
from third parties in any such acquisition.
In preparing this letter, we have assumed and relied
upon the accuracy and completeness of all factual or historical
information supplied or otherwise made available to us by or on<PAGE>
<PAGE> 5
behalf of LIN, McCaw, the Offeror's Appraiser or the Independent
Directors' Appraisers and have assumed that all financial
projections provided to us (including those included in the Other
Appraisers' Reports) were prepared in good faith, reflecting the
best estimates of the party which prepared such projections. We
also have assumed that LIN does not have any contingent
liabilities exceeding the reserves therefor established in LIN's
financial statements. We have not independently verified the
accuracy or completeness of, and we do not assume responsibility
for, any of such information or undertaken an independent
appraisal of any of the assets of LIN and its subsidiaries.
We have relied on the advice of counsel for McCaw,
counsel for the Independent Directors of LIN and our other
counsel on this matter, Cravath, Swaine & Moore, with respect to
legal and tax matters other than the issues relating to the
interpretation of the PMVG described above.
In arriving at our determination of the private market
value per Share, we have performed such analyses and studies as
we considered appropriate, including those set forth in the
report which accompanies this letter. In arriving at such
determination, we have assumed that the closing of any
acquisition by one or more parties of outstanding Shares or any
of LIN's business or assets would occur on June 30, 1995, and
nave not taken into account any possible impediments to such a
closing by a particular buyer regarding the need for regulatory
approval.
Our determination of the private market value per
Share, is necessarily based on market and other conditions as
they exist on the date of this letter.
Based upon and subject to the foregoing, and such other
matters as we consider relevant, we have determined that the
private market value per Share as defined under section 2(B) of
the PMVG, interpreted as described above, is $127.50.
We are not expressing any views on the value of the
Shares determined by any method, or on any basis, other than
pursuant to the standards of the PMVG, interpreted as described
herein. Values determined by other methods or on other bases
could differ materially from the amount set forth above.
We understand that Section 2(F) of the PMVG provides
that under certain circumstances McCaw will put LIN up for sale
under the direction of the Independent Directors of LIN and
pursuant to sale procedures to be set by them, and that McCaw may
or may not be requested by the Independent Directors of LIN to
<PAGE>
<PAGE> 6
bid in such sale process. Our determination of private market
value per Share set forth above is not necessarily indicative of
the value per Share that may be received by LIN stockholders
pursuant to any such sale process.
It is understood that this letter is for the
information of McCaw and LIN and is not a recommendation to any
LIN stockholder to accept or vote for a transaction proposed
pursuant to the PMVG. This letter is not to be circulated,
quoted or referred to, in whole or in part, orally or in any
registration statement, proxy statement or any other document or
any press release or public statement without our written
consent, except that it may be disclosed in its entirety.
Very truly yours,
WASSERSTEIN PERELLA & CO.
