Cumulus Media has rejected an offer to acquire the company for $15 to $17 a share, the broadcasting company said Wednesday.
The company did not list the prospective buyer, however Reuters previously reported that a consortium led by Jeff Warshaw, chief executive of broadcasting company Connoisseur Media, put in an offer to acquire the company and take it private at that price. In a letter to shareholders, Cumulus Media, which is third largest owner and operator of AM and FM radio stations in the U.S., said that price “undervalues” the business.
“After a careful and thorough review, conducted in consultation with our financial and legal advisors, the Board unanimously concluded that the indication of interest significantly undervalues the Company and is not in the best interests of its shareholders,” the letter reads. “The Company’s Board is open to all paths that continue to drive superior shareholder value.”
Shares of Cumulus Media have risen 46 percent over the past year. On Tuesday, the share price fluctuated between $13.05 and $13.94 during the trading session.
On Wednesday, the company announced a $50 million share buyback program. This was announced as part of its first-quarter earnings results, with revenue of $232 million, a 15 percent increase year-over-year and a net loss of $0.9 million, compared to a net loss of $21.9 million in the year-earlier quarter.
“Our strong momentum across business lines, multiple digital revenue growth drivers, operational efficiency and superior cash flow provide the Company with substantial untapped upside that it expects to continue to realize on behalf of its shareholders,” the company’s letter reads.
