One year ago, Cumulus Media initiated a “poison pill” defense to stave off the looming threat of a hostile takeover from billionaire Manoj Bhargava, who had been in acquisition mode with his “NewsNet” digital multicast television offering.
Today, NewsNet is defunct, and the 5-Hour Energy founder is no longer a major threat to Cumulus. As such, it is quietly putting that shareholder rights plan to bed, an SEC filing reveals.
The rights plan expired on February 20, and was designed to prevent any single entity from acquiring more than 15% of Cumulus’s Class A common stock without triggering a dilution mechanism. Bhargava’s Renew Group had acquired a 10.01% stake in Cumulus as of January 2024 and had publicly expressed its intent to raise its holdings to 20%.
Cumulus Board Chairman previously stated that the shareholder rights plan was intended to “ensure that all shareholders receive fair and equal treatment in the event of any proposed takeover” and to protect long-term value.
The end of the “poison pill” plan comes after months of speculation surrounding Renew Group’s increasing stake in Cumulus and concerns over a potential hostile takeover.
Bhargava drew negative media coverage following his acquisition of The Arena Group, which formerly owned Sports Illustrated. Under his leadership, Arena underwent significant upheaval in a matter of months, culminating in mass layoffs at SI and financial instability that led to the brand’s uncertain future.
With Cumulus’ plan now expired, it appears no further defensive measures will be needed. Renew Group has not yet disclosed its next course of action.
In an addendum, the SEC filing stated the Cumulus Board appointed Steven Galbraith to serve as both a member and Chairman of the Compensation Committee of the Board.
