Cumulus Media Adopts Short-Term Shareholder Rights Plan

RADIO ONLINE | Thursday, May 21, 2020

Cumulus Media

Cumulus Media has joined several other publicly traded broadcasters and adopted a short-term shareholder rights plan designed to protect shareholder interests and maximize value for all holders due to the unprecedented impact of the COVID-19 pandemic on equity market valuations. The company says the outbreak has led to substantial volatility in the trading of its stock and a dislocation in Cumulus' stock price, which its 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.

In connection with the adoption of the Rights Plan, the Board declared a dividend distribution of one right (a "Right") on each outstanding share of Class A common stock, share of Class B common stock, Series 1 warrant and Series 2 warrant. The record date for the dividend distribution is June 1 2020.

The Rights issued under 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 that situation, each holder of a Right (other than the acquiring person, whose Rights will become void and will not be exercisable) will be entitled to receive upon exercise of such Right that number of Class A common shares, Class B common shares, Series 1 warrants or Series 2 warrants, as applicable, having a market value of two times the exercise price of $25 per Right.

In addition, the Rights Plan contains a similar provision if Cumulus is acquired in a merger or other business combination after an unapproved party acquires 10% (20% in the case of a passive institutional investor) or more of the company's outstanding Class A common shares, including through ownership of the convertible Class B common shares and/or warrants. The board, at its option, may exchange each Right (other than Rights owned by the acquiring person that have become void) at an exchange ratio of one Class A common share, Class B common