Emmis Communications Corp. will remain a public company after executives announced Thursday morning that CEO Jeff Smulyan has abandoned his efforts to take the Indianapolis-based media firm private.
Smulyan had been trying for weeks to strike a deal with a group of preferred shareholders that also appeals to his financier, New York-based Alden Global Capital. Thursday morning marked the 10th time Smulyan canceled a scheduled shareholders meeting to vote on his $90 million buyout bid.
Emmis agreed in May to be acquired by JS Acquisition LLC, a private company formed by Smulyan to complete the buyout.
He announced Aug. 30 that Alden had backed out of an “agreement in principle” to sweeten the terms for the preferred shareholders. The move rendered the entire deal “unlikely” to happen, according to the company’s own press release.
“I think Jeff and the entire Emmis team are bitterly disappointed that the transaction didn’t conclude successfully,” Patrick M. Walsh, Emmis’ chief operating officer, said Thursday morning. “We thought we had a deal, and it’s unfortunate that Alden backed away from the deal.”
Smulyan and Alden agreed in April to take Emmis private. But in July, nine dissident investors emerged to block the deal. They collectively hold 38 percent of the preferred shares—more than enough to prevent Smulyan from securing the necessary two-thirds vote required to approve his plan.
The dissidents balked at Smulyan’s initial offer to convert their shares into bonds worth only 60 percent of the value of the shares, but paying an interest rate nearly double the 6.25 percent the shareholders currently enjoy.
Smulyan’s proposal also required approval from the holders of a majority of Emmis shares, a threshold he already has the votes to meet.
Founded by Smulyan in 1981, Indianapolis-based 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.