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Cumulus Confirms the big deal! |
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And Now The Confirmation From Cumulus
In a release this morning, Cumulus has now confirmed that a deal is in the works to purchase Citadel Communication for $37.00 per share.
Here is the full release:
Cumulus Media today confirmed that Cumulus and Citadel Broadcasting Corporation have entered into an exclusivity agreement to negotiate a merger agreement under which Cumulus would acquire all of the outstanding common stock and warrants of Citadel at a price of $37.00 per share. Citadel owns and operates 225 radio stations in over 50 markets and also operates the Citadel Media business, which is among the largest radio networks in the US.
Under the terms of Cumulus' proposal, the payment received by Citadel shareholders would consist of a combination of cash and Cumulus stock for each Citadel share and warrant, with a fixed exchange ratio. Based upon the proposed cash and stock election formula, the $37.00 per share consideration would, on average, be capped at a maximum of $30.00 per share in cash and a maximum of $14.00 per share in Cumulus stock. Based on actual elections made by Citadel shareholders and subject to proration, each Citadel shareholder could individually receive more or less cash or Cumulus stock than these amounts, up to the $37.00 per share total.
Cumulus expects to fund the cash portion of the purchase price with up to $500 million in equity financing from Crestview Partners and Macquarie Capital, and the remainder through debt financing to be led by UBS Investment Bank and Macquarie Capital. Cumulus, which previously announced the pending acquisition of the remaining equity interests that it does not currently own in Cumulus Media Partners LLC ("CMP"), also expects to complete a refinancing of all of the outstanding debt of Cumulus, CMP and Citadel as part of the proposed transaction.
Cumulus anticipates that the transaction, after giving effect to anticipated synergies, will be accretive relative to Cumulus' current Adjusted EBITDA trading multiple.
After giving effect to the proposed acquisition, Cumulus would own 570 radio stations across approximately 120 US markets.
A combination of Cumulus and Citadel, together with CMP, would provide Cumulus with:
•A truly national platform with approximately 120 US markets, including 8 of the top 10 markets;
•A balance sheet with lower overall leverage and a simplified capital structure;
•A significantly enhanced equity market capitalization for Cumulus, which would provide greater trading liquidity and strategic flexibility;
•The scale necessary to effectively compete and invest in the local digital media marketplace; and
•A network for the syndication of content and technology assets.
Execution of a definitive merger agreement with Citadel is subject, among other things, to completion of due diligence and financing arrangements. There can be no assurance the parties will reach a definitive agreement or, if an agreement is reached, that a transaction will be completed or on what terms. Any transaction would be subject to the approval of each company's board of directors, as well as obtaining regulatory and shareholder approvals, and other customary conditions.
UBS Investment Bank and Macquarie Capital are acting as financial advisors, and Jones Day is acting as legal counsel, to Cumulus in the transaction. JPMorgan Securities LLC and Lazard are acting as financial advisors, and Weil Gotshal & Manges LLP is acting as legal advisor, to Citadel.
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Radio Ink has confirmed that a deal to purchase Citadel, which includes the radio network and the former ABC-Disney properties and Citadel properties with 550 stations in 120 cities and eight of the top 10 markets has been agreed to. The offer, which was accepted is due to be announced at $37 a share ($30 cash).
The transaction valued at 2.4 billion and 1.5 billion in market equity totaling a $4 billion enterprize value. Radio Ink was unable to reach Lew Dickey of Cumulus or Farid Suleman of Citadel to confirm, however this information, which was leaked internally is believed to be accurate.
Radio Ink has also learned that there was a fierce battle to purchase Citadel between Cumulus and David Field of Entercom. Late last year Citadel rejected a $31.00 per share offer from Cumulus. More details will soon be posted to wwwRadioink.com
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| Radio Ink |
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The agenda for Radio Ink's Convergence 2011 is now online. Watch for more information, including speakers, panel participants, and other exciting conference news, to be posted often. Click the headline for the agenda, or click here to register for Convergence, set for May 18-19 at the Microsoft Silicon Valley Campus. |
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The economy is slowly turning around, and broadcasters are beginning to hire again. Put your name in front of the industry with a free listing in Radio Pros Available. And we'll be happy to post your aircheck or demo, or a link to your website. Click the headline to learn more. |
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