Cumulus Exits Chapter 11 Reorganization
Cumulus Media Inc announces today (10/16) that is has successfully completed its financial restructuring and emerged from the Chapter 11 reorganization process, following receipt of all required approvals, including from the Federal Communications 
Commission. Cumulus canceled 100% of its existing funded indebtedness – approximately $600 million – in exchange for 100% of the Company’s reorganized equity and $50 million of new convertible notes issued to former lenders. Cumulus is now a privately owned company with a new board of directors but retains its existing
management team. Cumulus president and CEO Mary Berner states, “I am grateful to our lenders and noteholders for their collaboration throughout this process, and to our employees, vendors, affiliates, customers, and partners for their continued trust and support. Emerging with a significantly stronger balance sheet, we are more committed than ever to providing engaging content across our national footprint, serving as a lifeline and voice for the local communities we serve, driving meaningful growth for our advertising partners, and delivering value for our new shareholders.”
January 24, 2024, the Group reported beneficial ownership of approximately 10.01% of the company’s outstanding Class A shares and stated its intent to acquire 20% of Cumulus. The Group has investments in other media companies, including a sizeable holding in a direct competitor of Cumulus Media. According to Investopedia, a poison pill “is a defense strategy used by the directors of a public company to prevent activist investors, competitors, or other would-be acquirers from taking control of the company. Poison pills are executed by buying up large amounts of its stock. They effectively block the accumulation of a company’s outstanding shares. Companies promise to distribute additional free or heavily discounted shares to all existing shareholders, which dilutes the shares so outsiders can’t take over the company by purchasing a controlling amount of shares.” Cumulus board chairman Andrew Hobson says, “Given the facts, the Cumulus board firmly believes it is necessary to adopt a limited-duration rights plan to protect the interests of all Cumulus shareholders. The Rights Plan is intended to enable the company’s shareholders to realize the long-term value of their investment, ensure that all shareholders receive fair and equal treatment in the event of any proposed takeover of the company, and guard against tactics to gain control of the company without paying all shareholders an appropriate premium for that control. Cumulus Media’s leadership maintains open dialogue with its investors, including the Group, and intends to continue that practice.”
Offer will expire at Midnight, New York City time, at the end of the day, on June 9, 2023 (the “Expiration Date”), unless extended or earlier terminated by Cumulus. The “modified Dutch auction” allows shareholders to select the price, within a price range specified by Cumulus, and the number of shares they are willing to sell at that price (or, should a higher price be determined as the “purchase price,” such higher price). The Offer is being made under Cumulus’s previously announced $50 million share repurchase program. The purchase price will be the lowest price per share (in increments of $0.05) of not greater than $3.25 and not less than $2.85 per share, at which shares have been properly tendered and not properly withdrawn, that will enable Cumulus to purchase the maximum number of shares having an aggregate purchase price not exceeding $10 million (or, if the Offer is not fully subscribed, all shares properly tendered and not properly withdrawn). Promptly after the Expiration Date, Cumulus will, on the terms and subject to the conditions described in the offer to purchase, determine the single per-share purchase price that Cumulus will pay, subject to proration and conditional tender provisions, for shares properly tendered at or below the purchase price in the Offer and not properly withdrawn, and accepted for payment, taking into account the number of shares tendered pursuant to the Offer and the prices specified, or deemed specified, by the tendering shareholders.