Las Vegas-based Citadel Broadcasting accepts $2 billion deal

Cumulus Media has agreed to acquire Las Vegas-based Citadel Broadcasting for about $2.4 billion.

Atlanta-based Cumulus, the nation’s second-largest radio broadcasting company, said in a statement Thursday that it will pay $37 a share for Citadel. The offer that yielded the deal is the same one Cumulus made to Citadel last month.

Cumulus had offered in November to buy Citadel for $2.1 billion, or $31 per share in cash and stock, and reiterated the offer in December. But shareholders for Citadel rejected that deal, saying it was too low.

Citadel Chairman and Chief Executive Officer Farid Suleman thought differently of this deal.

“We believe this transaction appropriately reflects the value of the company’s assets and is in the best interests of Citadel stockholders — who can benefit from a substantial cash payment as well as stock in the combined company,” he said in a company statement Thursday.

Citadel, the nation’s third-largest radio broadcasting company, operates 233 AM and FM radio stations nationwide and has offices on West Cheyenne Avenue. It operates four radio stations in Reno but none in Las Vegas. Citadel also operates KABC-AM and KLOS-FM in Los Angeles and WABC-AM in New York, among others.

Cumulus said the deal will give the company ownership of 572 radio stations across 120 U.S. markets. Cumulus said it expects the deal to close by year’s end.

“This transaction provides us with a unique opportunity to leverage our proprietary operating systems and technology platform across a vastly expanded national footprint,” Cumulus Chairman and CEO Lew Dickey said in his company’s statement. “We’ll have the national scope and financial strength necessary to make critical investments in content and technology necessary to compete in today’s rapidly evolving media landscape.”

Cumulus said it will discuss the deal further on Monday during a conference call to discuss quarterly earnings.

Citadel said the deal still requires the approval from its shareholders and from regulators.

Getting Citadel shareholders’ OK may be difficult. On Friday, seven law firms released statements saying they’d investigate the deal.

Brower and Piven of Stevenson, Md., for example, said it would investigate possible breaches of fiduciary duty to Citadel shareholders. Finklestein Thompson LLP of Washington, D.C., said it would investigate the deal’s potential unfairness to Citadel shareholders and potential conflicts of interests among Citadel board members.

Citadel Broadcasting Class B shares, which trade on the Pink Sheets, rose 15 cents, or 0.43 percent, Friday to close at $34.95. Cumulus shares, which trade on the Nasdaq Global Select Market, fell 6 cents, or 1.28 percent, to close at $4.64.

Contact reporter Matthew Crowley at
mcrowley@reviewjournal.com or 702-383-0304.