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Emmis privatization effort still on hold

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A group of preferred shareholders Friday evening refused to vote on an effort by Emmis Communications Corp. Chairman Jeff Smulyan to take the company private. It was the fifth such setback for Smulyan in four weeks since he began his privatization effort.

Company officials said discussions continue with the group of eight shareholders, which holds 38 percent of Emmis preferred shares.

A date for a new shareholders meeting won’t be determined until Monday, Emmis officials said.

The dissident group holds enough shares 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.

Emmis shares closed at $2.02 Friday, down 7 cents from a week ago. The stock remained below Smulyan’s offer of $2.40 per share, indicating there is doubt that the company's founder can pull off his plan. Smulyan’s offer through his JS Acquisition Inc. and New York private equity firm Alden Global Capital values the company at about $90 million.

Smulyan’s proposal also requires approval from the holders of a majority of Emmis shares, a threshold Smulyan likely would be able 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.

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.
 

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

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  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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