Friday, May 22, 2020

Cumulus Media Latest To Adopt 'Poison Pill' Plan

Cumulus Media Inc. announced Thursday the adoption of a short-term shareholder rights plan designed to protect shareholder interests and maximize value for all shareholders.

The Rights Plan is intended to protect shareholder interests by reducing the likelihood that any entity, person or group is able to gain control of Cumulus through open market accumulation without paying all shareholders an appropriate control premium or providing the Board sufficient opportunity to make informed judgments and take actions that are in the best interests of all shareholders.

The Rights issued pursuant to the Rights Plan would be exercisable only if a person or group acquires 10% (20% in the case of a passive institutional investor) or more of the Company’s outstanding Class A common shares (subject to certain exceptions), including through ownership of the convertible Class B common shares and/or warrants. 

In adopting the Rights Plan, the Board has taken note of the unprecedented impact of the COVID-19 pandemic on equity market valuations which has led to substantial volatility in the trading of the Company’s stock and a dislocation in Cumulus’ stock price, which the Board believes does not reflect the Company's inherent value or business performance.  The Rights Plan is intended to promote the fair and equal treatment of all shareholders by preventing a creeping change of control without an appropriate premium and on terms that would not deliver sufficient value for all shareholders.

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