Cumulus Makes $2.1B Bid for Citadel
NEW YORK (
) --
Cumulus Media
(CMLS) - Get Report
shares are up 3.7% today after the radio company offered to buy Citadel Broadcasting for about $2.1 billion.
Earlier this month, Citadel's board of directors rejected Cumulus' Nov. 29 proposal to buy its outstanding equity at $31 per share. The merger would have allowed the Citadel shareholders to receive cash or Cumulus stock.
Now Cumulus has reiterated its bid publicly, and claims that the merger would provide Citadel shareholders "superior value."
"This offer continues to represent a superior alternative in value, liquidity and potential growth for the former secured creditors of Citadel who, post-bankruptcy, are now the owners of the company," Cumulus chairman and CEO Lew Dickey said.
Earlier this year, Citadel reorganized under Chapter 11 protection. In a Dec. 17 letter to Citadel's board, Cumulus CEO Dickey said he does not understand why the company has been "unwilling to engage with us to explore such a transaction and to consider its benefits to Citadel and its shareholders."
Dickey explains that the $31 per Citadel share offer represents an approximate 16% premium to the average price for the twenty days leading up the proposal.
Cumulus is the second largest radio broadcaster in the U.S. with about 345 radio stations in 67 markets. Citadel is the third largest with over 200 stations across the nation.
Cumulus is up about 3.7% today to around $3.85, while its share price is up more than 65% over the past year.
-- Written by Theresa McCabe in Boston.
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