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Smulyan Deadline for Emmis Offer Today

Will Emmis go private or not; will there be another extension

We’ll see if Emmis Communications chairman/CEO Jeff Smulyan sticks to his deadline of today for the board of directors to accept his offer to take the Indy-based broadcaster private.

The deadline could be moved. In fact, Smulyan has already twice ditched his deadline over the span of the past three weeks. During the broadcaster’s second quarter earning’s call on Thursday Smulyan answered several questions that hammered away at the behind the scenes negotiations taking place, which seem likely to continue right up until the last minute or until the offer is accepted.

Smulyan’s mid-August tender offer of $4.10 per share of publicly held shares prompted the company’s board to form a special committee of independent and disinterested directors to evaluate the proposal. Since then the special committee has let two of Smulyan’s deadlines pass. The current offer expires today without further action by one of the parties.

Emmis, which went public in 1994, reported second quarter earnings on Thursday that Smulyan called “disappointing.” Its stock price was down four cents on Thursday to close at $4.01.

“Negotiations are continuing with the special committee. It’s been a very productive, professional discussion and I think we are making some very good progress,” Smulyan said on the conference call Thursday. “If we reach an agreement with (the special committee) it will then be up to our shareholders to decide whether they want the liquidity and the ability to cash out or they don’t.”

Smulyan said he thinks Emmis, which owns 19 FM and four AM radio stations in the U.S., just isn’t big enough to operate as a publicly owned entity. “We believe it makes more sense for this company to be private because of all the costs of being public and the other issues of being a public company of this size.”

The Emmis founder also was asked about plans to sell its Terre Haute, Ind., cluster of radio stations and its Emmis Publishing division, except for Indianapolis Monthly magazine.

“Nothing is done yet. Although, we have had very constructive negotiations for Terre Haute and Texas Monthly (magazine),” he said.

Smulyan said the sale of the Terre Haute stations and Texas Monthly will go through regardless of the go private offer’s success or failure. “Given the constraints in our core radio business and given the challenges of having two start ups like NextRadio and Digonex, we just need to get our leverage down. So we believe that deleveraging this company is important.”