The radio industry was buzzing late Thursday when Reuters posted a story that Connoisseur Media CEO Jeff Warshaw floated an offer to buy Cumulus for between $300 and $340 million. Here’s how the Cumulus Board of Directors reacted.
Here’s the statement we received from Cumulus confirming an offer is on the table: “Cumulus Media confirmed receipt of a letter with respect to an unsolicited, non-binding, highly conditional indication of interest. Consistent with its fiduciary duties and in consultation with its financial and legal advisors, the Cumulus Board of Directors is reviewing the letter.”
Cumulus’ stock price jumped about 40% after the Reuters report surfaced. The reported Warshaw offer is for $15 to $17 per share. The stock price had been plodding along in the $10-$11 range for the past year.
The report also said that Warshaw might be willing to pay more for the company once he has a chance to get a closer look at the books.
The financial experts we spoke to following the Reuters report say there are several ways this could now go; the Cumulus Board of Directors could ignore the offer and continue to operate as is, or, they could engage with Warshaw and allow a possible sale move to the next step. Everyone we spoke to believes it’s prudent for the shareholders of the company that the Board at least take a look at this offer or justify why it did not engage.
Cumulus’ Board of Directors is made up of:
Andy Hobson (Innovatus Capital)
David Baum (former investment banker)
Mathew Blank (former CEO of Showtime Networks)
Tom Castro (Founder and CEO of El Dorado Capital)
Joan Gillman (former cable executive)
Brian Kushner (FTI Consulting)
Mary Berner (CEO of Cumulus)
Cumulus emerged from Chapter 11 bankruptcy protection back in June of 2018 after filing in November of 2017. The company was able to cut its debt by more than $1 billion to $1.3 billion. Cumulus owns over 400 radio stations.
Warshaw’s Connoisseur Media now owns 13 stations. He’s been in the radio business for decades. He’s the chair of the Nielsen Audio Advisory Council and incoming RAB Board chair.
Warshaw is no stranger to Cumulus. The original Connoisseur Communications, which back in the 1990’s, had accumulated about 40 stations was sold to Cumulus in 2000 for $258 million.
Warshaw had no comment about the Reuters report.
The offer, as reported by Reuters, is actually for $1.2 Billion, not what’s in this article. The offer includes assumption of debt. Perhaps RadioInk is subtracting that amount from the actual offer.