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Emmis investor: Selling stations could yield big returns

April 23, 2007

A big Emmis Communications Corp. investor suggested in a regulatory filing today that the Indianapolis company should sell trophy radio properties to unlock value for shareholders.

Elkhart-based Martin Capital Management responded to growing rumors on Wall Street that Emmis is considering selling New York City’s WQCD-FM 101.9, an underperforming smooth jazz station.

CL King & Associates analyst James Boyle said in a report that the station might fetch $150 million to $200 million. In a filing with the Securities and Exchange Commission today, Martin Capital said that by selling WQCD and other prized stations “the company would certainly have an opportunity to monetize valuable assets that are not contributing to cash flow in appropriate proportion to their private sale value.”

Martin listed stations in Chicago and Los Angeles that also could reap rich prices.

An Emmis spokeswoman declined to comment on rumors WQCD is on the block.

IBJ reported over the weekend that analysts believe Emmis CEO Jeff Smulyan may soon make another bid to take the company private. A board committee last year rebuffed Smulyan’s first offer, deeming it too low.

CL King’s Boyle said selling WQCD would reduce Emmis’ substantial debt. Shedding debt, he noted, could make Emmis more digestible for Smulyan to buy.

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