Cumulus/Citadel meger

Garrett Wollman
Sat Mar 12 16:36:33 EST 2011

<<On Sat, 12 Mar 2011 15:49:53 -0500, Kevin Vahey <> said:

> Obviously this is a big merger between 2 companies that are not doing well.
> It doesn't affect Boston radio but can we expect changes in Providence,
> Worcester, Springfield, Portsmouth and Bangor?

This has been in the works for a few weeks now.  Interestingly,
Cumulus is not structuring this transaction the way they did the (much
smaller) Susquehanna purchase several years ago.  Cumulus is getting a
$500 billion investment and taking on additional debt, as well as
refinancing the existing debt of Cumulus, Cumulus Media Partners, and
Citadel, plus they're buying out the other equity investors in Cumulus
Media Partners.  (CMP was the minority-owned subsidiary the Dickeys
created to finance the acquisition of Susquehanna.)  Citadel
shareholders will have the option of Cumulus stock or cash, up to
certain aggregate limits.

The new Cumulus will certainly be a bigger company that Lew Dickey has
ever run.  There will be a good number of markets where spinoffs will
be required; if I read the merger agreement correctly, these will all
be Cumulus proper stations.  This will effectively be a transfer of
control for Cumulus, so they will have to divest their existing
grandfathered over-market-limit stations, but the paperwork has not
hit the FCC database yet so I can't tell which ones.  (There was a
list of spinoffs in an annex to the merger agreement, but that part
was omitted from the SEC filing.)

> How will legacy stations like WABC and WLS be treated? There are rumors that
> Entercom is still making a bid for the Chicago cluster.

If Lew is smart, there will probably be some sort of reorganization
that groups all of the top-market stations together, and likewise the
smaller-market stations.  My impression was that he was a pretty
shrewd guy (which is why I bought Cumulus stock when it hit bottom a
few years ago), but I've also heard that he's cheap, so who knows.


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