Indianapolis Star Reports Some Shareholders Are Unhappy With Jeff Smulyan's Privatization Offer

Is $4.10 Per Share Enough?

Last week (NET NEWS 8/18), ALL ACCESS reported EMMIS COMMUNICATIONS CORP. CEO JEFF SMULYAN had proposed taking EMMIS private. SMULYAN made a cash offer through his E ACQUISITION CO. at $4.10 per share to merge with EMMIS and sell or spin off its print magazine division (except for INDIANAPOLIS MONTHLY), Gospel WLIB-A/NEW YORK, and the company's TERRE HAUTE radio cluster. A special committee of disinterested members of EMMIS' Board will consider the offer, which expires FRIDAY, SEPTEMBER 16th.

Now, THE INDIANAPOLIS STAR reports, "SMULYAN's offer to take EMMIS COMMUNICATIONS CORP. private is putting him in an awkward position: downplaying the company's most exciting product. Shareholders of the INDIANAPOLIS-based media company say SMULYAN is attempting to buy them out at a lowball price just before EMMIS makes a splash with a product that could compete with music apps such as SPOTIFY and PANDORA. EMMIS' app, NEXTRADIO, accesses chips in smartphones to let users listen to FM radio for free. Although the app has been available since 2013, investors say EMMIS is on the verge of monetizing it after years of piling up heavy losses. Some shareholders want EMMIS to remain public so they can reap the benefits."

"NEXTRADIO has enormous potential that will come to fruition in the next few years," JOHN FRANCIS of SANTA MONICA, CA-based FRANCIS CAPITAL MANAGEMENT LLC, wrote in an email. "The Board should not consider any buyout transaction that includes NEXTRADIO for at least three years." SMULYAN disagreed with the criticism, saying, "No matter what the price is, people say, 'Oh, my gosh, this is an outrageous price.' The special committee will hire advisers and lawyers, they'll tear apart the company, and there'll be a negotiation. I view this (opposition) as an attempt to influence the negotiation, which is fine. People have a right to do that. But for people to say the stock, which has been at one level for years and years, should double, that does not comport with reality."

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