Cumulus sued over buyout


A class action law firm, Holzer Holzer & Fistel, announced that it has filed suit on behalf of Cumulus Media shareholders against the company, Merrill Lynch Global Private Equity (MLGPE) and certain Cumulus officers and directors over the pending deal to sell the company to a group that includes Cumulus CEO Lew Dickey and MLGPE (7/24/07 RBR #143). “The complaint alleges defendants violated applicable law by breaching and/or aiding the other defendants’ breaches of their fiduciary duties of loyalty, due care, candor, independence, good faith and fair dealing through this transaction, which the complaint alleges was unlawfully designed to divest Cumulus’s public stockholders of a large portion of the valuable assets of the Company for grossly inadequate consideration,” the law firm said in announcing the suit. The buyout group has proposed to pay Cumulus shareholders 11.75 per share, a premium of 40.4% over the pre-announcement closing price. Including debt assumption, the deal totals 1.3 billion.