One year ago, Cumulus Media initiated a “poison pill” defense to stave off the looming threat of a hostile takeover from billionaire Manoj Bhargava. Now Cumulus is quietly putting that shareholder rights plan to bed as the danger fades, per an SEC filing.
The rights plan, which expired on February 20, was designed to prevent any single entity from acquiring more than 15% of Cumulus’s Class A common stock without triggering a dilution mechanism. Bhargava’s Renew Group had acquired a 10.01% stake in Cumulus as of January 2024 and had publicly expressed its intent to raise its holdings to 20%.
Chairman of the Board Andrew Hobson previously stated that the shareholder rights plan was intended to “ensure that all shareholders receive fair and equal treatment in the event of any proposed takeover” and to protect long-term value.
The peaceful end comes after months of speculation surrounding Renew Group’s increasing stake in Cumulus and concerns over a potential hostile takeover.
Bhargava, best known for founding 5-Hour Energy, has drawn media scrutiny following his acquisition of The Arena Group, which formerly owned Sports Illustrated. Under his leadership, Arena underwent significant upheaval in a matter of months, culminating in mass layoffs at Sports Illustrated and financial instability that led to the brand’s uncertain future. NewsNet, a broadcast TV network which was also bankrolled by Bhargava, ceased operations in August.
With Cumulus’ plan now expired, it appears no further defensive measures will be needed. Renew Group has not yet disclosed its next course of action.
In an addendum, the SEC filing stated the Cumulus Board appointed Steven Galbraith to serve as both a member and Chairman of the Compensation Committee of the Board.
