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The lawsuit that Emmis Communications founder and CEO Jeff Smulyan filed in the wake of his failed buyout attempt provides some details about how the terms were improved for the preferred shareholders and for his former financial backer, Alden Global Capital. So, who didn’t get a better deal?
Let’s see – if the Preferred Shareholders Lock-Up Group succeeded in getting better financial terms, Alden got better financial terms and the public shareholders were going to get the same $2.40 in cash for each share – who does that leave? In a brief interview with RBR-TVBR Executive Editor Jack Messmer, Smulyan confirmed that his position was the one that worsened as the result of the deal renegotiation.
Smulyan insisted that the position for Alden was “dramatically improved” in the deal renegotiation. Nevertheless, the investment firm backed out of the buyout and Smulyan is now suing for breach of contract.
The lawsuit claims that Alden was spooked by a drop in radio stock prices. That came as ad sales and cash flow were continuing to improve for radio companies, including Emmis. “The metrics of our company are doing better than we had projected…so a court of law will make that determination,” Smulyan said.
A spokesman for Alden declined to comment when contacted by RBR-TVBR.
You can listen to the brief interview on this page, and then there’s plenty more to read about the legal battle.
Jeff Smulyan, Emmis, taking Alden to court over failed deal
Smulyan’s lawsuit claims Alden got cold feet
Improved deal for Emmis preferred shareholders finally disclosed
