Cumulus Media to acquire Citadel Broadcasting

Radio broadcast company Cumulus Media has entered into a definitive merger agreement to acquire Citadel Broadcasting Corporation. Under the terms of the deal, Cumulus will acquire all of the outstanding common stock and warrants of Citadel at a price of $37.00 per share. This consideration is payable in cash and shares of Cumulus stock, and values Citadel as an enterprise at approximately $2.4 billion. Citadel owns and operates 225 radio stations in over 50 markets and also operates the Citadel Media business, which is among the largest radio networks in the U.S.

Cumulus also expects to complete a refinancing of all of the outstanding debt of Cumulus, Citadel and Cumulus Media Partners in conjunction with the proposed merger. Cumulus has obtained commitments for up to $500 million in equity financing from Crestview Partners and Macquarie Capital, and commitments from a group of banks for up to $2.525 billion in senior secured credit facilities and $500 million in senior note bridge financing, the proceeds of which will be used to pay the cash portion of the merger consideration, and effect the refinancings.

Cumulus anticipates that the merger, after giving effect to anticipated synergies, will be accretive relative to Cumulus’ current Adjusted EBITDA trading multiple. After giving effect to the proposed acquisition, Cumulus would own 572 radio stations across approximately 120 U.S. markets. Cumulus expects to complete the merger by the end of 2011.

UBS Investment Bank is acting as lead financial advisor to Cumulus, and it also has committed to Cumulus to provide debt financing. Macquarie Capital is also acting as a financial advisor to Cumulus, and it has committed to provide debt and equity financing. Moelis & Company delivered a fairness opinion to the Board of Cumulus. Jones Day is acting as legal counsel to Cumulus in the transaction. Goldman, Sachs & Co. is acting as a financial advisor to Crestview Partners.

USA, Las Vegas & Atlanta

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