Chase Manhattan Bank is leading a multifaceted financing package for the $1.7 billion acquisition of Providence, R.I.-based LIN Television Corp. by Hicks, Muse, Tate & Furst Inc.
The package also includes $122.5 million for the acquisition of WOOD-TV, an AT&T-owned station in Grand Rapids, Mich.
Chase will lead a $700 million loan and a $500 million high-yield bond offering for the deal.
Hicks Muse will commit about $600 million of equity capital.
The Dallas-based leveraged buyout firm, formed in 1989, has never made so large an investment.
Hicks Muse will retain an equity investment in excess of 50% in the company through its Hicks Muse Tate & Furst Equity Fund III. Certain limited partners will be brought in for co-investment, including Chase Capital Partners Inc.
Chase Securities Inc. also advised Hicks Muse on the deal. When Morgan Stanley & Co., which co-advised LIN with Wasserstein Perrella, brought the transaction idea to Hicks Muse, the firm tapped Chase-lead lender to both LIN and AT&T-to arrange the financing.
"Chase was the financial source that was ideally positioned," said Michael Levitt, a Hicks Muse partner. "They knew the companies, and it was helpful to us in providing certainty to AT&T and LIN, since Chase has a great deal of credibility with both of these partners."
Chase also had a leg up because it had brought Hicks Muse two other transaction ideas this year, including the purchase of International Home Food Products.
"It is certainly a little bit of a reward for having brought us IHF," Mr. Levitt said.
Though banks and investment banks have been lining up to finance the LIN transaction since it was announced Tuesday, Chase's win underscores the key role ideas play as banks vie to finance the lucrative community of leveraged buyout firms.