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Smulyan considering another option to take Emmis private

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Emmis Communications Corp. CEO Jeff Smulyan is considering an "alternative structure" for his bid to take the company private after facing opposition from a group of preferred shareholders attempting to block the deal.

The Indianapolis-based radio and magazine company postponed a decision on the deal Tuesday night after it failed to receive enough votes from shareholders, either in person or by proxy, to reach a quorum. It will convene another shareholders’ meeting at 6:30 p.m. Friday.

As the $2.40-per-share offer stands, Smulyan needs two-thirds of preferred shareholders to OK a change in the company's articles of incorporation for the the deal to proceed. Preferred shareholders also must agree to convert their shares into bonds—at 60 cents on the dollar—in exchange for an attractive interest rate of 12 percent. 

Last month, eight firms that hold Emmis’ preferred stock banded together to prevent the sale. Collectively they hold 38 percent of Emmis’ preferred shares.

Although the company did not disclose details, it said in a news release that Smulyan is continuing to negotiate with the preferred shareholders and is considering other avenues, including an option that would not require their consent.

Still, “there can be no assurance that either an agreement will be reached with the group of holders of preferred stock or that an alternative structure can be implemented,” Emmis said in the release.

A majority of common shareholders also would have to approve the buyout.

Emmis stock opened Wednesday morning at $1.60 and soared nearly 29 percent, to $2.06, by late morning, stirring optimism that a deal could get done despite the delay.

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

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.

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  1. what Steve is doing and if he is on another radio station. That is the station I will listen to.

  2. From the story: "The city of Indianapolis also will consider tax incentives and funding for infrastructure required for the project, according to IEDC." Why would the City need to consider additional tax incentives when Lowe's has already bought the land and reached an agreement with IEDC to bring the jobs? What that tells me is that the City has already pledged the incentives, unofficially, and they just haven't had time to push it through the MDC yet. Either way, subsidizing $10/hour jobs is going to do nothing toward furthering the Mayor's stated goal of attracting middle and upper-middle class residents to Marion County.

  3. Ron Spencer and the entire staff of Theater on the Square embraced IndyFringe when it came to Mass Ave in 2005. TOTS was not only a venue but Ron and his friends created, presented and appeared in shows which embraced the 'spirit of the fringe'. He's weathered all the storms and kept smiling ... bon voyage and thank you.

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  5. First off, it's "moron," not "moran." 2nd, YOU don't get to vote on someone else's rights and freedoms that are guaranteed by the US Constitution. That's why this is not a state's rights issue...putting something like this to vote by, well, people like you who are quite clearly intellectually challenged isn't necessary since the 14th amendment has already decided the issue. Which is why Indiana's effort is a wasted one and a waste of money...and will be overturned just like this has in every other state.

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