Preferred shareholders blocking Emmis’ repurchase plans

Back to TopCommentsE-mailPrintBookmark and Share

A group of preferred shareholders of Emmis Communications Corp. is attempting to block the Indianapolis-based media company’s offer to repurchasing another $6 million of preferred stock.

Emmis announced Dec. 1 its intention to pay between $12.50 and $15.56 per share for the preferred stock, and on Dec. 12 increased the minimum purchase price to $14.

But a group of preferred shareholders that includes New York-based Corre Partners Management LLC has banded together to prevent the sale of those shares through a lock-up agreement, according to Securities and Exchange Commission documents.

They're concerned that through repurchases, Emmis would amass voting rights for two-thirds of the preferred stock, and that it might use the clout to remove "its obligation to pay the amount of dividends that are currently accrued and unpaid” and to eliminate the right of preferred stockholders to nominate directors to Emmis' board.

Because of its financial struggles, Emmis has suspended making its quarterly dividend payments on preferred shares since October 2008. The payments normally would total more than $2.4 million a quarter.

Emmis announced Nov. 11 that it planned to repurchase up to $35 million in preferred stock from various investors at a huge discount. It has reached agreements to buy more than $28 million so far.

Emmis' offer to purchase another $6 million in preferred shares expires Dec. 30 unless the company extends it.

The preferred stock repurchase plan is the latest bid by the heavily leveraged company to gain financial breathing room.

Emmis is funding the repurchases by borrowing up to $35 million from Chicago financier Sam Zell. The money is due to be paid back by February 2015, at an annual interest rate of 23 percent.

Before the repurchases began, the company had about $140 million in preferred stock outstanding. However, those shares were trading for just $42 million.
Common shares of Emmis are trading at 75 cents each. Those shares will need to rise to or above the $1 minimum for at least 10 consecutive business days before Feb. 27 to remain listed on the NASDAQ exchange.


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. President Obama has referred to the ACA as "Obamacare" any number of times; one thing it is not, if you don't qualify for a subsidy, is "affordable".

  2. One important correction, Indiana does not have an ag-gag law, it was soundly defeated, or at least changed. It was stripped of everything to do with undercover pictures and video on farms. There is NO WAY on earth that ag gag laws will survive a constitutional challenge. None. Period. Also, the reason they are trying to keep you out, isn't so we don't show the blatant abuse like slamming pigs heads into the ground, it's show we don't show you the legal stuf... the anal electroctions, the cutting off of genitals without anesthesia, the tail docking, the cutting off of beaks, the baby male chicks getting thrown alive into a grinder, the deplorable conditions, downed animals, animals sitting in their own excrement, the throat slitting, the bolt guns. It is all deplorable behavior that doesn't belong in a civilized society. The meat, dairy and egg industries are running scared right now, which is why they are trying to pass these ridiculous laws. What a losing battle.

  3. Eating there years ago the food was decent, nothing to write home about. Weird thing was Javier tried to pass off the story the way he ended up in Indy was he took a bus he thought was going to Minneapolis. This seems to be the same story from the founder of Acapulco Joe's. Stopped going as I never really did trust him after that or the quality of what being served.

  4. Indianapolis...the city of cricket, chains, crime and call centers!

  5. "In real life, a farmer wants his livestock as happy and health as possible. Such treatment give the best financial return." I have to disagree. What's in the farmer's best interest is to raise as many animals as possible as quickly as possible as cheaply as possible. There is a reason grass-fed beef is more expensive than corn-fed beef: it costs more to raise. Since consumers often want more food for lower prices, the incentive is for farmers to maximize their production while minimizing their costs. Obviously, having very sick or dead animals does not help the farmer, however, so there is a line somewhere. Where that line is drawn is the question.