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Cumulus Completes Citadel Acquisition

September 16, 2011: "With the completion of the Citadel acquisition, Cumulus Media is the largest pure-play radio broadcaster in the United States, and owns or operates more than 570 radio stations in 120 markets and a nationwide radio network serving over 4,000 stations."

So said Cumulus Media as it announced Friday morning that it has completed the acquisition of Citadel Broadcasting and Citadel is now its wholly owned subsidiary. Cumulus added more than 200 stations with the transaction, as well as Citadel Media Networks.

Cumulus said that, based, on preliminary results of yesterday's vote by Citadel shareholders and prorating procedures under the merger agreement, Cumulus expects to pay about $1.4 billion in cash and issue about 22.2 million shares of its Class A stock and warrants to purchase 71.7 million more to Citadel shareholders. Citadel shareholders who elected to receive cash or who didn't choose between cash and stock will receive $30.40 a share and 1.521 shares (or a warrant) of Cumulus stock for each share.

The Cumulus-Citadel merger marks the end of a tumultuous few years for Citadel that began with its purchase of 22 ABC Radio stations and ABC Radio Networks in 2006. By 2008, a tumbling stock price led to warnings from the New York Stock Exchange and delisting in March 2009. Citadel filed for Chapter 11 at the end of that year, and after reorganization was forced to rescind stock grants to top executives and replace the grants with options after a private equity shareholder filed suit. Cumulus began pursuing Citadel in 2010, and, after two offers were rejected by the Citadel board, Cumulus made the negotiations public. The companies came to a deal in March.

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