The special committee of independent directors at Cox Radio has evaluated the $3.80 per share offer from Cox Enterprises to buy out other shareholders and given it a thumbs up. Clearly, that is not what some stock speculators had expected.
Since the offer was made March 23rd shares of Cox Radio have traded above the offer level. That indicated that the market expected Cox Enterprises to be forced to sweeten its bid. The stock closed Friday at $4.25.
But after the market closed, Cox Radio issued a statement that the special committee named last week had completed its work and endorsed the buyout. The decision was unanimous. The independent directors agreed that “the price being offered in the tender offer by Cox Media Group, Inc., an indirect and wholly owned subsidiary of Cox Enterprises, Inc., to purchase all of the outstanding shares of Class A common stock of Cox Radio not already owned by Cox Media Group for $3.80 per share, is fair, from a financial point of view, to Cox Radio’s stockholders, other than Cox Media Group and Cox Enterprises. The Special Committee unanimously recommended, on behalf of Cox Radio, that the stockholders of Cox Radio accept the tender offer and tender their shares of Class A common stock pursuant to the tender offer.”
Meanwhile, at least three class action lawsuits have been filed, each claiming that the buyout offer is unfair to minority shareholders and seeking to block it from closing. Cox Radio itself filed copies of the lawsuits with the SEC, along with the special committee recommendation and the fairness opinion from their financial advisor.