UPDATE: Emmis postpones buyout decision

Back to TopCommentsE-mailPrintBookmark and Share

Emmis Communications Corp. on Tuesday postponed a decision on CEO Jeff Smulyan's bid to take the company private, saying it did not receive enough votes from shareholders—either in person or by proxy—to reach a quorum.

The Indianapolis-based radio and magazine company will convene another shareholders' meeting at 6:30 p.m. Friday.

Securities and Exchange Commission rules prohibit executives from saying how many more votes are needed, but only five shareholders were present at the meeting Tuesday evening at Emmis' Monument Circle headquarters.

Smulyan did not attend the meeting. Emmis executives declined to say why he was not present but said a forthcoming press release would explain his absence.

Details were not immediately available, but Indianapolis attorney Jim Strain said the $2.40-per-share offer Smulyan announced in April could be revised by Wednesday morning. The tender offer for common shares expired Tuesday at 5 p.m.

“We’re not in a position to tell what the status of the offer is,” said Strain, who represents Emmis. “An announcement has to be made before the market opens tomorrow. We don’t know what that offer will be.”

Strain said Emmis executives are limited in what they can divulge because of SEC rules. He declined to speculate on whether the deal is in trouble.

Smulyan, through his JS Acquisition Inc. and New York private equity firm Alden Global Capital, had offered $2.40 per share, a bid that valued the company at about $90 million. Emmis stock closed Tuesday at $1.60.

Observers said the recent stock slide sent a signal that investors were skeptical the deal would go through.

“Somebody’s concerned that the deal’s not going to happen,” said Mark Foster, chief investment officer at Kirr Marbach & Co. in Columbus, Ind., which does not own any Emmis shares.

Smulyan’s buyout bid has been threatened by shareholder lawsuits since just days after he announced his plans in April. But the biggest cloud came last month when eight firms that hold Emmis’ preferred stock banded together to block the deal. Collectively they hold 34 percent of Emmis’ preferred shares.

That’s enough to prevent Smulyan from winning two-thirds approval from preferred shareholders to convert their shares into bonds—at 60 cents on the dollar—in exchange for the attractive interest rate of 12 percent. That conversion, in addition to approval by a majority of Emmis' common shareholders, is necessary to allow the buyout to go through.

Jeffrey Meltzer, a local shareholder who said his Emmis stock is valued in the “six figures,” was one of the few shareholders to attend the meeting.

He said he hasn’t tendered his common shares yet because the sale hinges on the actions of preferred shareholders.

“I was just curious to see how it panned out,” he said of his decision to attend the meeting. “I suspected it wasn’t going to be a simple process.”

Meltzer said he thought the tender offer could have been higher but is not “disappointed” in the bid.

Founded by Smulyan in 1981, Emmis owns 23 radio stations in the United States and publishes regional magazines in seven cities, including Indianapolis Monthly. It also operates radio stations in Slovakia and Bulgaria.

The company’s audience base has been trimmed by competition from satellite radio and iPods at the same time advertisers have funneled more dollars to the increasing number of websites and cable television channels.

Over the past four years, Emmis’ revenue has swooned by 33 percent to $243 million. Its continuing operations have wracked up losses of more than $430 million.

That performance has caused Emmis’ share price to plunge since the last time Smulyan tried to take the company private in May 2006. At that time, Smulyan’s buyout group offered $15.25 per common share, but could not come to terms with the company’s board of directors.


  • Not a good idea
    I have remembered the incident when Smulyuans then girlfriend was not making her car payments and hid her car in his garage. The repo men came to take her car from his garage and they filed complaints against Honda. Sounds dishonest to me.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.