bloggingbuyouts

Cumulus Media Inc. (NASDAQ: CMLS) has announced that the management-led investor group has terminated the planned merger agreement. While there was a glimmer of hope that this was going to be rekindled, the deal spread on this was so wide that a fleet of trucks could have driven between it.

Cumulus has agreed with the investor group led by Lew Dickey, its Chairman, President and CEO, and an affiliate of Merrill Lynch's (NYSE: MER) Global Private Equity, to terminate the merger agreement which first came on July 23, 2007. The members of the investor group informed Cumulus that after exploring possible alternatives they were unable to agree on terms on which they could proceed with the buyout.

As a result of the termination of the merger agreement, the investor group has agreed to promptly pay Cumulus a merger termination fee of $15 million. In addition, the terms of the previously announced amendment to Cumulus' existing credit agreement will not take effect. Cumulus had a market cap of $253.6 million based upon a $5.81 close on Friday.

The company has also announced that its board of directors intends to explore the possible implementation of a new stock repurchase plan in the near-term in order to provide liquidity opportunities to stockholders.

The Blackstone Group, LP (NYSE: BX) has another Alliance Data Systems Corp. (NYSE: ADS) law-suit on its hands. According to the Wall Street Journal, this time the credit-card processor has accused Blackstone of breaking their agreement to buy the company for $6.4 billion and demands $170 million as a breakup fee.

This is the second time Alliance has sued Blackstone over the proposed merger. In January, they withdrew a law suit that attempted to force the completion of the merger after Blackstone assured them the deal would go through. Apparently and no one can blame them, they backed out again, prompting the latest law suit.

Blackstone said the pull out is due to a $400 million backstop requirement imposed by the Office of the Comptroller of the Currency to support OCC regulated Alliance. Alliance alleges Blackstone failed to use "its best efforts" to earn OCC approval and that Alliance took many steps to solve the problem.

Blackstone maintains they did not breach any conditions outlined in the merger agreement and the accusations will be strongly contested. Alliance shares are down over 2% today to $51.55 on a 52-week range of $39.54 to $80.79. The deal valued Alliance shares at $81.75. Blackstone shares are also down by 2% to $18.50 on a 52-week range of $13.40 to $38.00.