Smulyan fails to take Emmis private

Back to TopCommentsE-mailPrintBookmark and Share
Year In Review

Jeff Smulyan in 2010 tried for the second time in four years to take Emmis Communications Corp. private, only to see a group of dissident investors band together to block the deal at the 11th hour.

Smulyan, Emmis’ chairman and CEO, offered $2.40 for each common share, a price that valued the entire company at $90 million. Closing the deal hinged on getting Emmis’ preferred shareholders to accept a 60-cents-on-the-dollar swap for new bonds carrying a higher interest rate.

The preferred investors in the fall launched talks to sweeten the deal, and Emmis agreed to up the value of the bonds to 77.5 cents on the dollar.

According to Emmis, Smulyan’s financial partner, New York-based Alden Global Capital, initially agreed to the modifications. But a few days later, Alden principal Randy Smith told Smulyan a “precipitous” drop in the value of radio-industry assets made the deal unattractive.

After the buyout unraveled, Emmis shares plummeted, and they now trade for only about 50 cents apiece. The low stock price reflects investor anxiety over the company’s more than $340 million in senior bank debt.

But Smulyan has contended that concerns about excessive debt are overblown.

Smulyan founded Emmis in 1981. The company 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.

When Smulyan tried to take Emmis private in 2006, he offered $15.25 a share, but was unable to reach agreement with the board. Emmis’ stock price later plunged, in part because of a deep slump in radio advertising.•


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