Emmis Board Proposes Reverse Stock Split, Changes To Preferred Stock
March 14, 2012 at 3:45 AM (PT)
EMMIS COMMUNICATIONS CORPORATION has filed notice with the SEC of a special shareholder meeting to consider a reverse stock split. In the SEC filing, EMMIS wrote, "The proposal to approve the Reverse Stock Split Authorization requires the holders of Common Stock, voting together as a single class, casting more votes in favor than against the Reverse Stock Split Authorization, assuming a quorum is present, with the shares of Class B Common Stock being entitled to ten votes per share."
The meeting date was left blank on the SEC form but the proposed agenda calls on shareholders to authorize the board to amend the company's articles to effect the reverse stock split (within the range of 1-for-3 and 1-for-8) by the earlier of EMMIS' 2013 annual shareholders' meeting or JUNE 30th, 2013. The vote will also consider changes to EMMIS' outstanding 6.25% Series A Cumulative Convertible Preferred Stock that would eliminate the class' dividends and change the designation of the class from cumulative to non-cumulative, while also eliminating present buyback and conversion requirements for the stock upon certain occurrences.
Within the filing, EMMIS said that all directors other than DAVID GALE, appointed by Preferred shareholders, support the proposed amendments.
In a statement accompanying the filing, EMMIS added that it "responded to requests by our Preferred Shareholders for liquidity and offered all our preferred shareholders, including the few remaining holdouts, the opportunity for liquidity. We were very clear in our most recent tender offer regarding the company potentially amending the preferred terms. Our Board, with the exception of the Director elected by the preferred shareholders, recommends the common shareholders vote to approve the amendments to the terms of the preferred as well as vote to provide the Board the discretion to implement a reverse stock split."