Citadel Broadcasting and buyer-to-be Cumulus Media announced that election forms from Citadel shareholders and warrant holders are due Friday, September 9th. This is the payout election, not the shareholders vote on the merger. That’s set for September 15th.
“Pursuant to the terms of the Merger, Citadel Securityholders have the opportunity to elect to receive, upon completion of the Merger, (i) 8.525 shares of Cumulus Class A common stock (the ‘Stock Consideration’), (ii) $37.00 in cash (the ‘Cash Consideration’) or (iii) a combination of Stock Consideration and Cash Consideration, in each case subject to proration, as the consideration for each share of Citadel common stock or warrant to purchase Citadel common stock that they own,” noted the joint announcement.
The cash/stock payout is limited to approximately $1.4 billion in cash and 151 million Cumulus shares, as reported when the deal was cut back in March. To the extent that either the cash or stock portion is oversubscribed, the cash/stock split will be prorated.
RBR-TVBR observation: Since virtually all of Citadel’s shares and warrants are held by professional investment funds this is pretty much a no-brainer. Since the recent stock price for Cumulus is below the tipping point of $4.34 they will elect 100% cash. But since the cash is capped the payout will be prorated and they’ll receive approximately $30 cash and 1.613 Cumulus shares for each Citadel share/warrant.