It's Official: Cumulus Acquires Citadel
March 10, 2011 at 4:20 AM (PT)
CUMULUS MEDIA has made it official, announcing that it has entered into a definitive merger agreement to purchase CITADEL BROADCASTING CORP. The deal will give CITADEL shareholders the right to receive a choice of $37 in cash or 8.525 shares of CUMULUS common stock for each share of CITADEL stock. Based on the $37 price, the deal values CITADEL at approximately $2.4 billion. CUMULUS will acquire 225 radio stations in over 50 markets and syndicator CITADEL MEDIA in the transaction, giving the combined operation 572 radio stations across approximately 120 U.S. markets.
In the digital age, scale is essential in order to make the necessary investments in content and technology required to compete against new media. With 120 markets, 570 stations and a fully-distributed network, we will now have that critical mass.
CUMULUS expects to refinance all of the outstanding debt of CUMULUS MEDIA, CUMULUS MEDIA PARTNERS (which it is in the process of acquiring the remaining equity interests it does not already own), and CITADEL as part of the deal, and has obtained commitments for up to $500 million in equity financing from CRESTVIEW PARTNERS and MACQUARIE CAPITAL, and up to $3.025 billion in debt financing.
CUMULUS Chair./CEO LEW DICKEY told ALL ACCESS exclusively, "This transaction uniquely positions CUMULUS to compete more effectively in today’s rapidly changing media environment. In the digital age, scale is essential in order to make the necessary investments in content and technology required to compete against new media. With 120 markets, 570 stations and a fully-distributed network, we will now have that critical mass. We look forward to working with and learning from the talented team at CITADEL as we combine these two great companies."
"CITADEL's Board of Directors has been focused on maximizing stockholder value," said CITADEL Pres./CEO FARID SULEMAN. "We believe this transaction appropriately reflects the value of the Company's assets and is in the best interests of CITADEL stockholders -- who can benefit from a substantial cash payment as well as stock in the combined company, which provides the opportunity to participate in the upside of the combination. I am particularly grateful to CITADEL's dedicated employees who have been instrumental in creating substantial value since the Company's reorganization in JUNE 2010."
CRESTVIEW PARTNERS Partner and former AMFM CEO JEFFREY MARCUS added, "We are pleased to be partnering with LEW DICKEY, who we know and respect, as well as his team of talented managers, to create this remarkable national radio platform which we believe will have the scale to effectively compete and, importantly, to invest in the local digital media marketplace."