LIN Television Corp -- which owns WIVB-TV, Channel 4, the CBS affiliate in Buffalo -- today accepted a sweetened $1.9 billion takeover bid from buyout firm Hicks, Muse, Tate & Furst Inc.
The new bid forced Raycom Media Inc. to drop its rival bid, the companies said.
Hicks will pay about $1.6 billion, or $55 a share, in cash and assume some of LIN's debt. The deal comes two days after Raycom revealed a bid worth $52.50 a share, and is 16 percent higher than an initial Hicks-LIN agreement announced in August.
LIN shares were up 87 1/2 cents at $53 in afternoon trading on the Nasdaq Stock Market, earlier reaching a high of $54.12 1/2 after the richer deal was announced.
LIN is the nation's 22nd-largest television group. It owns eight network-affiliated television stations and operates four additional stations in the same markets.
Montgomery, Ala.-based Raycom, which owns 25 network-affiliated television stations, is owned by the Retirement Systems of Alabama pension fund.
AT&T Corp. owns 45 percent of Providence, R.I.-based LIN, which was formed in 1994 as a spinoff of LIN Broadcasting Corp.
Dallas-based Hicks also has interests in radio and cable TV in the United States and Latin America.
The higher bid was expected because Hicks covets LIN's eight stations and management team as part of its plan to become one of the nation's largest broadcasters. Companies like Raycom and Hicks have been snapping up stations following a new law that relaxed restrictions on ownership, allowing them to cut costs, cross-sell advertising and boost profit.
"This is really a full price for the company," said Jeffrey Jones, an analyst at Donaldson Lufkin & Jenrette.