Farid Tells Employees The Deal With Cumulus is Coming
February 17, 2011 –
In an e-mail to employees Citadel boss Farid Suleman all but confirmed the sale of Citadel to Cumulus that Radio Ink reported earlier. Here is the press release he sent out to employees.
Citadel Broadcasting Corporation (“Citadel”) today announced it has entered into an agreement providing for exclusive negotiations for a potential merger with Cumulus Media Inc. (“Cumulus”). Cumulus is the second largest radio broadcaster in the United States based on station count, controlling 347 radio stations in 67 US media markets.
Under the terms of its non-binding proposal, Cumulus would pay $37.00, in a combination of cash and Cumulus stock, for each Citadel share and warrant. Based upon the proposed cash and stock election formula, the $37.00 per share consideration would on average be capped at $30.00 per share in cash and at $14.00 per share in Cumulus stock at a fixed exchange ratio. Based on actual elections made by Citadel shareholders and subject to proration, each Citadel shareholder could individually receive more or less cash or Cumulus stock than these amounts, up to the $37.00 per share total.
As part of the Cumulus proposal, Cumulus has indicated that Crestview Partners and Macquarie Capital are expected to provide up to $500 million in equity financing. Cumulus expects to obtain the remainder of the cash necessary to fund the transaction through debt financing to be led by UBS Investment Bank, together with Macquarie Capital.
Execution of a definitive agreement is subject, among other things, to completion of due diligence and financing arrangements. There can be no assurance the parties will reach a definitive agreement or, if an agreement is reached, that a transaction will be completed or on what terms. Any transaction would be subject to the approval of the two companies’ boards, regulatory and shareholder approvals, and other customary conditions. J.P. Morgan and Lazard are acting as financial advisors and Weil, Gotshal & Manges LLP is acting as legal advisor to Citadel. UBS Investment Bank is acting as financial advisor and Jones Day is acting as legal advisor to Cumulus.
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