Cumulus Buyout Terminated
Atlanta radio broadcaster will receive $15 million termination fee and agreed to be acquired nearly a year ago.
May 12, 2008
Cumulus Media said Monday that has terminated its $1.3 billion deal to be acquired by an investor group led by Merrill Lynch Global Private Equity.
The publicly traded Atlanta radio broadcaster disclosed that “members of the investor group informed the company that, after exploring possible alternatives, they were unable to agree on terms on which they could proceed with the transaction.”
Cumulus, a $196.9 million market-capitalized company, had agreed to be purchased for $11.75 per share in July 2007.
Following its announcement, Cumulus’ Nasdaq-traded shares declined 22.3% to $4.51 a share, compared with a previous close at $5.81 per share. Its CMLS-ticker shares have traded at a range of $4.87 to $11.74 per share over the past year.
The news comes just a week after the nation’s second-largest radio station operator, which manages 339 radio stations in 65 markets, reported a first-quarter loss of $4.2 million. It also reported $18.3 million in adjusted Ebitda on $72.9 million in revenue for the first quarter.
Merrill Lynch Global Private Equity, the private investment arm of Merrill Lynch, and the investor group that also includes Cumulus chief executive Lewis Dickey and his brother John Dickey (executive vice president and co-chief operating officer of Cumulus), will pay a $15 million fee to the radio business as a result of the deal’s termination.
Cumulus’ transaction termination marks the latest casualty of last year’s credit market retrenchment.
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