Another day, another delay for Emmis going-private vote

It's starting to feel like Groundhog Day over at Emmis Communications headquarters on Monument Circle.

The movie version, that is. Is Bill Murray available to play CEO Jeff Smulyan?

Smulyan delayed a shareholder vote Friday, for the eighth time overall and second time in 24 hours, on a proposed deal to take the company private.

He's trying to strike an agreement that's palatable for both a group of preferred shareholders and his financier, New York-based Alden Global Capital. The proposed deal would be worth about $90 million.

Most recently, the meeting was scheduled for Sept. 2, moved to Sept. 3, and now is slated for Sept. 8. But the ultimate deadline probably is Sept. 24, when the original financing deal between Alden and an entity controlled by Smulyan, announced in April, expires.

Emmis executives, including Chief Operating Officer Patrick M. Walsh, have said they are not optimistic the parties will be able to reach a deal.

"The parties are still talking, but we haven't made as much progress as we hoped and we think a deal is unlikely," Walsh said Friday morning.

Emmis shares rose about 3 percent in early trading, to $1.64 each, on news of another delay. The shares remain more than 30 percent below Smulyan's tender offer of $2.40 per share, factoring in the risk the deal will fall through.

Walsh said Indianapolis-based Emmis is "bouncing back" from the recession and slowdown across the media industry, and will be working to "build on that momentum" whether it remains a public company or goes private.

Emmis announced Monday morning that Alden had backed out of an “agreement in principle” to sweeten the terms for the preferred shareholders. That move rendered the entire deal “unlikely” to happen, the company said.

Emmis’ stock swooned on the news, falling by nearly 27 percent at one point Tuesday. The shares bounced back a bit Thursday to close at $1.59.

“Investors are betting against the deal being revived,” wrote Tom Taylor, news editor of the industry publication Radio-Info.com, on Tuesday. He noted that talks are ongoing but added, “It may be too late to save the deal.”

Company officials were more hopeful Thursday night, delaying the meeting by less than 24 hours.

Smulyan and Alden agreed in April to take Emmis private. But, in July, nine dissident investors emerged to block the deal. They collectively hold 38 percent of the preferred shares—more than enough to prevent Smulyan from securing the necessary two-thirds vote required to approve his plan.

The dissidents balked at Smulyan’s initial offer to convert their shares into bonds worth only 60 percent of the value of the shares, but paying an interest rate nearly double the 6.25 percent the shareholders currently enjoy.

Smulyan’s proposal also requires approval from the holders of a majority of Emmis shares, a threshold he already has the votes to meet.

Founded by Smulyan in 1981, Indianapolis-based Emmis owns 23 radio stations in the United States and publishes regional magazines in seven cities, including Indianapolis Monthly. 

This is not the first time Smulyan—the company's controlling shareholder—has tried to take Emmis private. Smulyan made an offer in May 2006 to acquire all 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.