Smulyan considering another option to take Emmis private

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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