Las Vegas-based Citadel Broadcasting, an operator of 233 AM and FM radio stations nationwide, has resumed negotiations to sell itself to Cumulus Media for around $2.5 billion.
In a statement Thursday, Citadel, the nation’s third-largest U.S. radio broadcasting company, said Cumulus proposed to pay $37 in cash and Cumulus stock for each Citadel share and warrant. The deal would top a $2.1 billion, $31-per-share cash-and-stock deal Cumulus, the nation’s second-largest U.S. radio broadcasting company, offered in November and reiterated in December.
The $37 a share price would also exceed the $34.16 a share closing price Citadel Class B shares recorded Thursday on the Pink Sheets. The B shares rose $3.66, or 12 percent, on news of the deal.
Atlanta-based Cumulus has secured equity financing commitments from Crestview Partners and Macquarie Capital, for up to $500 million, Citadel said in its statement; UBS and Macquarie are expected to lead debt financing.
In December, Citadel, which has offices on West Cheyenne Avenue and operates KABC-AM and KLOS-FM in Los Angeles and WABC-AM in New York, among others, rejected Cumulus’ $2.1 billion takeover offer, saying it was too low.
Jonathan Doorley, a spokesman for Citadel, said the company would not comment beyond the statement.
But an unnamed source told The New York Times on Thursday that talks between the two companies started this week, are continuing and may still collapse. Citadel seemed to corroborate this by saying in the statement, “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.”
One concern of Citadel’s management, a source told the Times, is that a deal would require a significant amount of debt. CNBC.com said the deal would require Cumulus to finance a cash payment of more than $1 billion.
Citadel filed for bankruptcy protection in December 2009 and emerged in June. Times columnist Gretchen Morgenson reported last month that Citadel cut its senior debt position from $2.1 billion before the bankruptcy to around $760 million immediately after it.
Cumulus operates 347 radio stations. Cumulus shares, which trade on the Nasdaq Global Select Market, rose 47 cents, or 10.9 percent, to close at $4.78.
Contact reporter Matthew Crowley at
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