BellSouth May Revise Merger Offer With Lin

BellSouth Corp. may revise a proposal to merge its cellular telephone operations with those of Lin Broadcasting, according to a statement Lin filed Monday with the Securities and Exchange Commission.

Lin, the target of an unwanted takeover offer by Kirkland, Wash.-based McCaw Cellular Communications, said BellSouth indicated in a letter to Lin’s management last Friday that it would shortly submit a new offer. Such a move by the Atlanta-based company would show whether the regional telephone firms think McCaw is a serious threat to their growth in the lucrative cellular industry.

A Lin spokeswoman said BellSouth provided no details of a revised proposal in its brief letter. BellSouth officials couldn’t be reached Monday.

Lin initially proposed a merger with BellSouth as an alternative to a McCaw takeover of Lin. But McCaw last Tuesday sweetened its offer to buy a controlling interest in Lin to $125 a share from $110 a share. Lin’s board said Monday that it wouldn’t take a position on the new proposal, in part because of a possible offer from BellSouth.

BellSouth, already a major player in the cellular telephone industry, would present a serious challenge to McCaw’s dominance of the growing industry. A merger by either suitor would create the nation’s largest cellular telephone firm.

Lin said its board also recommended that holders not sell their shares to McCaw until “uncertainties” concerning the structure of the new McCaw offer are clarified. Lin said McCaw may have misled some shareholders on a purported “guarantee” of the future value of the Lin shares it would not buy immediately. McCaw said that after five years it would offer to buy the rest of Lin or sell the New York-based company. “There is no obligation to purchase . . .. The board is concerned whether the McCaw proposal is, therefore, illusory and, perhaps reflective of McCaw’s inability to get all cash financing,” Lin said.