Cumulus deal breaks up


Cumulus Media Inc. will remain Cumulus Media Inc., after the investment group that had been attempting to take the company private decided they could not make the numbers work out. Instead, they’ll pay $15M to walk away from the table.

President/CEO Lew Dickey said, "Our business remains fundamentally sound and we intend to continue to operate it aggressively and explore opportunities to create and deliver value for our shareholders."

Discussing the company’s recent quarterly results conference, most analysts agreed that it was outperforming its peers, but at the same time, they were having a hard time seeing the privatization deal making it to the finish line at its target price of $11.75/share.

Cumulus announced it would immediately look into “…the possible implementation of a new stock repurchase plan that would provide liquidity opportunities to stockholders.” It just as rapidly noted that it wasn’t making any promises to that effect, either.

RBR/TVBR observation: Anybody who was surprised by this development probably also still gets a jolt from one of those old-fashioned crank-operated jack-in-the-boxes. More and more broadcasters are seeing the wisdom of unhitching themselves from the brutal three-month yoke required in financial circles. But access to the Wall Street off-ramp is increasingly difficult to find.

Lew Dickey must feel he has something in common with the Lloyd Bridges character in the Zucker Brothers’ classic “Airplane!” You know, the guy who keeps saying “Guess I picked the wrong week to give up [fill in the blank].” By most accounts, Cumulus business fundamentals are sound, but so many factors out of its control are going down the tubes. “Guess I picked the wrong year to go private” may well be the most appropriate business quote to use in this young millennium.