Citadel Broadcasting shareholders will vote September 15th on approval of the $2.5 billion cash/stock sale of the company to Cumulus Media. Assuming all of the stars are in alignment, Cumulus CEO Lew Dickey tells RBR-TVBR he expects to close the same day.
As he builds Cumulus Media into a $4 billion company, Dickey recently closed on the first of two acquisitions – rolling privately owned Cumulus Media Partners, which Cumulus Media already managed, into the public company.
That $740 million deal may have seemed like a minor transition to outsiders, but Dickey said that was not the case – since his company previously owned only about 15% of the company and the private equity companies who were the majority owners could have decided to sell to someone else.
Dickey called the CMP closing a “seminal transaction” which sets the stage for the Citadel closing, which will make Cumulus the largest pure-play radio company in the country – hopefully renewing Wall Street interest in the sector with Cumulus Media having a much, much larger stock float.
Despite the turbulent market’s the $2.4 billion in senior financing to complete the Citadel acquisition and refinance the debt of Cumulus/CMP was completed in late July. That package was restructured as the credit markets tightened, but still got done. The total package consists of a $1.325 billion first lien term loan facility that matures seven years from the Citadel closing, a $790 million second lien term loan facility with a seven and a half year maturity and a $300 million revolving credit facility that runs five years. That’s all in addition to the $610 million in eight-year bonds that Cumulus sold in April.
Still needed are regulatory approvals, including the FCC’s blessing, but Dickey has his fingers crossed for all of the lights to be green by September 15th. If so, the Citadel shareholders will vote (pretty much a done deal, since the vulture capital firms who own most of the stock are anxious to cash out) and before the day is out the merger will be closed.
RBR-TVBR observation: Lots of people thought Lew was nuts when he started lining up equity backing in the depths of the recession to go seeking acquisitions. It took a long time to get the right deal together – particularly given the reluctance of Citadel management – but the end is in sight and Cumulus will soon be a giant. Then it will be up to Lew and his team to show Wall Street how they are going to drive shareholder value.