Cumulus to become private in buyout.

Byline: From Register-Guard and news service reports

ATLANTA - Radio station owner Cumulus Media Inc. has agreed to a $507.7 million cash buyout offer from a group of investors that includes the company's chief executive.

The investor group is being led by Chief Executive Lewis Dickey, who will remain in that role once the deal closes, and an affiliate of Merrill Lynch Global Private Equity.

Cumulus has six stations in the Eugene area: AM stations KUGN and KSCR, and FM stations KZEL, KNRQ, KEHK (Star 102.3) and KUJZ (`The Moose').

No changes are anticipated for the local stations, said Michael O'Shea, Cumulus Eugene general manager. O'Shea saw the buyout as good news for the company.

"It's actually kind of a trend that's going on in radio right now, where public companies take themselves private," he said. "Cumulus is the number two largest in the country, based on the number of stations." Taking the publicly listed company will increase its flexibility and its ability to grow, he said.

"The original management that founded the company back in the early '90s, they're the ones that took it public in the late '90s, now they're taking it private," he said.

Under the terms of the buyout, the buyers would pay $11.75 a share, a 40 percent premium over Friday's closing price, for each of the roughly 43.2 million shares of Cumulus stock outstanding.

The buyers also would assume debt that would boost the value of the transaction to $1.3 billion, the company said in a statement.

The news sent Cumulus shares up $2.75, or 32.9 percent, to close at $11.12 after briefly rising to a new 52-week high of $11.74. The stock had traded at $8.36 to $11.68 in the past year.

Cumulus said the transaction will be financed through a combination of equity contributed by Dickey, his brother and fellow executive, other members of their family and Merrill Lynch Global Private Equity, and debt financing that has been committed by Merrill Lynch Capital Corp.

The Dickeys and stockholders affiliated with Banc of America Capital Investors have agreed to vote their shares of Cumulus stock in favor of the deal or any superior proposal approved by the Cumulus board.

After completing pending acquisitions and divestitures, Cumulus will own or operate 344 radio stations in 67 U.S. markets either directly and through its investment in Cumulus Media Partners. Cumulus had $334 million in revenues last year.

The deal is subject to shareholder and regulatory approval, and the company can solicit bids for 45 days.

Register-Guard business editor Ilene Aleshire and The Associated Press contributed to this report.