Emmis Buys Back Stock, Settles With Alden Global Capital
Radio Group Can Now Go Private
November 22, 2011 at 4:49 PM (PT)
EMMIS COMMUNICATIONS CORP. has reached a deal to repurchase more than one million shares of preferred stock from ALDEN GLOBAL CAPITAL for $16.3 million, the INDIANAPOLIS BUSINESS JOURNAL reports. EMMIS is paying $15.75 for each share.
According to EMMIS, a previous deal to buy ALDEN’s preferred stock for $15 a share fell through after EMMIS board member JOSEPH SIEGELBAUM leaked confidential information to ALDEN. EMMIS sued SIEGELBAUM three days after he resigned from the board, but has dropped that suit as well as one against ALDEN over its decision to back out of a deal that would have taken EMMIS private.
"I’m pleased we were able to come to terms with ALDEN, bringing an end to this difficult relationship between EMMIS and our largest preferred shareholder," EMMIS CEO JEFF SMULYAN said in a statement. "This is an important milestone for EMMIS."
To finance the preferred stock purchases, EMMIS is borrowing up to $35 million from an affiliate of CHICAGO financier SAM ZELL. The money is due to be paid back by FEBRUARY 2015, at an annual interest rate of 23%. when the repurchases from ALDEN are complete, EMMIS will have drawn down $28.5 million of ZELL’s $35 million