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Cumulus Media Subject of $1.2B Acquisition Bid by Jeff Warshaw-Led Consortium

A consortium of investors led by veteran radio industry executive Jeff Warshaw has made an unsolicited $1.2 billion bid to buy Cumulus Media, the radio network that owns and operates 406 radio stations, the Westwood One syndication operation and a digital radio platform.

According to press reports, Warshaw’s consortium is willing to pay $15-$17 a share for Cumulus and may go even higher if due diligence of the company’s financials justifies an increased valuation. Besides Warshaw, the other members of the investor consortium haven’t been disclosed. The news was first reported by Reuters.

Warshaw is the founder and CEO of Connoisseur Media, which owns and operates 13 radio stations that broadcast in Connecticut, Maryland and Long Island, according to the company’s website. In 2020, he also launched a SPAC — a blank check corporation dubbed Virtuoso Acquisition Corp. that acquired a minority stake in Wejo, a Manchester, U.K.-based company described as a connected car company in press reports.

Cumulus, which is currently led by president and CEO Mary Berner, has issued a statement saying it’s reviewing the offer. The company’s annual meeting is scheduled for May and its current board of directors is up for renewal, with the company urging that they all be voted in again, according to its proxy statement on file with the U.S. Securities and Exchange Commission.

Cumulus shares closed on April 14 at $14.21 on news of the bid, up 39.9% from the previous day’s close of $10.16, according to Yahoo! Finance. Since then, NASDAQ has apparently halted trading in the stock due to its volatility.

With 20,625,542 shares of Cumulus common stock outstanding, the April 14 closing price gives the company a market capitalization of $293.1 million, an increase in valuation of $84 million from the prior day’s market capitalization of $209.1 million. The other $900 million from the $1.2 billion offer would likely be used to retire existing debt — a $353.84 million term loan and $445.1 million in debentures, as of Dec. 31, 2021, according to Cumulus’ 10-K filing with the SEC.

In 2021, Cumulus Media reported $17.3 million in net income, or 83 cents per diluted share, on revenues of $916.5 million. That represented a turnaround from a prior-year loss of $59.7 million, while revenues increased 12.2% from $816.2 million.

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