Emmis chief looks to take company private

Emmis Communications Corp. CEO Jeff Smulyan has entered into an agreement to take the Indianapolis-based media company private.

JS Acquisition Inc., the company Smulyan has established to complete the acquisition, would purchase all shares of publicly
traded Emmis for $2.40 each, or about $90 million, according to a Monday morning announcement.

Emmis spokeswoman Kate Snedeker said Monday that Securities and Exchange Commission rules prohibit company executives, including
Smulyan, from discussing the plan.

This is not the first time Smulyan—the company's controlling shareholder—has tried to take Emmis private.
But his failure to do so before means he’s in line to get a much better deal this time around.

Smulyan made an offer in May 2006 to acquire all of the shares of Emmis for $15.25 per share in a deal that valued the company’s
stock at $567 million. He called off the deal a few months later after he couldn’t reach terms with the board. The company
later declared a special $4-per-share dividend.

Smulyan's offer is about 84-percent discount to the previous offer, which corresponds directly to the drop in Emmis’
share price as the radio industry faltered.

Emmis shareholder Frank Martin, president of Martin Capital Management in Elkhart, has lobbied for Emmis to go private in
the past but is skeptical of the timing of the latest deal.

“It’s too bad they’re buying everybody out at two bucks a share when, at one time, Smulyan was riding high
at 70 bucks a share," Martin said.

Emmis shares rebounded from a 52-week low of 25 cents a piece in July to close Friday at $2.30 each.

The company last fall faced delisting from the NASDAQ composite index but managed to close above $1 per share for 10 consecutive
days in October, saving the firm's listing on the exchange.

Earlier this month, Emmis disclosed that it had failed to pay a preferred stock dividend for six consecutive quarters, putting
its preferred stockholders in line to elect two new directors to the company’s board.

Emmis General Counsel and Secretary J. Scott Enright said the company owes its preferred stockholders about $14 million in
missed dividends. A missed payment April 15 triggered the board expansion.

Emmis' board currently has eight seats. As a result of its missed dividends, holders of the company's 3 million or
so preferred shares had until the end of the day Monday to nominate candidates to fill two new board positions. Preferred
shareholders would vote exclusively on the two seats at Emmis' annual meeting July 14, with one vote per share owned.

But according to Monday’s announcement, the deal would eliminate the right of shareholders to nominate directors to
Emmis’ board.

Founded in 1981, Emmis owns 23 radio stations in the United States and publishes regional magazines in seven cities. It also
operates radio stations in Belgium, Slovakia and Bulgaria, and owns interest in a Hungarian station.