Emmis Radio Withdraws From Public Markets

Unlike Wall Street, Company Sees Bright Future for Radio

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NEW YORK (AdAge.com) -- Betting on the increasingly common sentiment that radio is a better business than Wall Street seems to believe, Emmis is looking to take itself private.
Emmis owns 21 FM and 2 AM radio station in several of the country's largest markets.
Emmis owns 21 FM and 2 AM radio station in several of the country's largest markets.

Emmis' shares rose 23% to $16.50 on the news, and the company has launched a proposal to buy outstanding publicly held shares for $15.25 per share in cash, which represents a 13.6% premium over last Friday's closing price of Emmis' Class A common stock. The proposal values the outstanding shares at $567 million and the company at approximately $1.4 billion.

National presence
Emmis owns 21 FM and 2 AM radio stations in several of the country's largest markets -- including New York, Los Angeles and Chicago, as well as St. Louis, Indianapolis, Terre Haute, Ind., and Austin, Texas. It also publishes city and regional lifestyle magazines including Texas Monthly and Los Angeles. It has steadily been shedding its TV assets, the latest of which, WKCF-TV, its WB-cum-CW affiliate in Orlando, it has agreed to sell to Hearst-Argyle.

Emmis' board of directors has formed a special committee of independent directors that will select its own independent financial and legal advisors and consider the proposal. Jeff Smulyan, the company's CEO, and the other directors of Emmis that are members of management will not participate in the evaluation of the proposal, which requires the recommendation of the special committee and the approval of the board of directors.

In general, radio's strong margins have remained, even as the medium has fallen out of favor with Wall Street because of its slow growth prospects. The proposal to take Emmis private follows a move earlier this year in which Cumulus formed a private partnership with Bain Capital, Blackstone Group and Thomas H. Lee Partners to buy Susquehanna, a 33-station group, for $1.2 billion.
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