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Cumulus Media Inc. (CMLS) Announces Proposal for Strategic Merger

|Includes: Cumulus Media Inc. (CMLS)

Cumulus Media Inc., the nation’s second largest radio broadcaster based on station count, today announced that Cumulus and Citadel Broadcasting Corp. have entered into an exclusivity agreement in regards to a merger agreement in which Cumulus will acquire all of the outstanding common stock and warrants of Citadel for $37 per share.

The merger of Cumulus, Citadel and CMP would provide Cumulus with approximately 120 U.S. markets, including eight of the Top 10 markets, bringing Cumulus’ station ownership count to 570 radio stations.

The deal will also result in Cumulus having a balance sheet with lower overall leverage and simplified capital structure; an enhanced equity market capitalization for Cumulus, thereby resulting in great trading liquidity and flexibility; an enhanced competitive edge in the local digital media marketplace; and a syndicated network of content and technology assets.

Per Cumulus’ proposal, Citadel shareholders would receive a cash and Cumulus stock combination for each Citadel share and warrant with a fixed exchange ratio. The $37 per share price would be capped at $30 per share in cash and a maximum of $14 per share in Cumulus stock.

Cumulus said it expects to pay the cash portion of the purchase price with up to $500 million in equity financing from Crestview Partners and Macquarie Capital. It expects to pay the remainder through debt financing to be led by UBS Investment Bank and Macquarie Capital.

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