Reuters is reporting that Connoisseur Media is ready to spend $1.2b for the third largest radio broadcaster…
By Paul Marszalek
In a little fish eats big fish play, tiny Connoisseur Media is reportedly offering to purchase Cumulus Media, the nation’s third largest radio broadcaster, for up to $1.2b, including debt.
The offer comes from a consortium led by Connoisseur Media’s Jeff Warshaw, who has offered $15-$17 per share for the more than 400 radio stations and other assets, which include the Westwood One Radio Network.
The actual market cap of Cumulus is actually less than $300 million, thus the debt portion is substantial.
Cumulus stock soared by more than 40% in the late afternoon after a report broke from Reuters’ Greg Roumeliotis and Dawn Chmielewski.
The stock opened at $10.24 per share, and moved to nearly $15 in after-hours trading.
Connoisseur Media is a well-regarded, but quite small broadcaster, operating 13 stations in small and middle-sized markets in Connecticut, Long Island, and Maryland. From an operational standpoint, it’s a strong fit considering Cumulus’ primarily medium market focus.
Cumulus retains a few stations in major markets, such as Chicago and Atlanta, but has historically struggled to compete in the majors against iHeart and Entercom. Its San Francisco operation has been King Midas-in-reverse for years, allowing once dominant brands such as KGO to collapse (1.2 share) and KFOG to become an FM translator for sports-talk KNBR — which, even with the FM simulcast, now posts just a 2.2 share.
It’s hard to imagine that all Cumulus stations make the cut under new ownership, which could make for an exciting time for others to expand or possibly even make room for new entrants.