Radio station company Cumulus Media agrees to $508M buyout offer

<p>Radio station owner-operator Cumulus Media Inc. has agreed to sell the company for $507.7 million in cash to a group of investors that includes its chief executive.</p><p>Cumulus, the second-largest radio company in the U.S. based on station count, would be acquired by an investor group led by Chief Executive Lewis Dickey and an affiliate of Merrill Lynch Global Private Equity.</p><p>The deal is subject to shareholder and regulatory approval, and the company can solicit higher bids for 45 days.</p><p>Under the deal announced Monday, the buyers would pay $11.75 a share, a 40 percent premium over Friday's closing price, for each of the roughly 43.2 million shares of Cumulus stock outstanding.</p><p>The buyers would also assume debt that would boost the total value of the transaction to $1.3 billion, the Atlanta-based company said in a statement.</p><p>The news sent Cumulus shares soaring $2.75, or 32.9 percent, to $11.13 in morning trading Monday after briefly rising to a new 52-week high of $11.74. The stock previously traded between $8.36 and $11.68 over the past year.</p><p>Cumulus' board has approved the buyout and has recommended that shareholders do the same. Dickey, who will continue as CEO after the deal is completed, said the buyout "represents an important chapter in our company's history."</p><p>The Dickeys and stockholders affiliated with Banc of America Capital Investors have agreed to vote their shares of Cumulus stock in favor of the deal or any superior proposal approved by the Cumulus board.</p><p>Cumulus said the transaction will be financed through a combination of equity contributed by Dickey, his brother and fellow executive, other members of their family and Merrill Lynch Global Private Equity, and debt financing that has been committed by Merrill Lynch Capital Corp.</p><p>After completing pending acquisitions and divestitures, Cumulus will own or operate 344 radio stations in 67 U.S. media markets either directly and through its investment in Cumulus Media Partners.</p>

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