Emmis' Privatization Vote Postponed Again
Fifth Time Not The Charm, Either
August 27, 2010 at 4:13 PM (PT)
EMMIS COMMUNICATIONS' fifth attempt to put its privatization offer to a vote has been postponed. The INDIANAPOLIS BUSINESS JOURNAL reports that a group of preferred shareholders refused to vote on EMMIS Chairman's Jeff SMULYAN's latest offer; a new date for the vote won't be made until next MONDAY.
Two obstacles prevent SMULYAN from getting his deal approved. First, the dissident group holds enough shares to prevent Smulyan from winning two-thirds approval from preferred shareholders to convert their shares into bonds -- at 60 cents on the dollar -- in exchange for the attractive interest rate of 12%. Secondly, EMMIS' current stock price -- $2.02 -- is below the plan's offer of $2.40 per share, which casts doubt on SMULYAN's ability to make it work financially.