A day after announcing a deal with Jeff Smulyan to take Emmis Communications private, Alden Global Capital has filed an updated account of its Emmis holdings with the SEC. The filing shows it was buying up Class A common stock as recently as October 2009 and Emmis’ preferred stock as recently as last month.
Alden’s holdings in Emmis are through two vulture funds that it manages – the Alden Global Distressed Opportunities Fund LP and the Alden Global Distressed Opportunities Fund GP LP. The funds own 4,243,578 shares of the Class A commons stock of Emmis. As detailed in Alden’s letter of intent for the deal to take Emmis private, that is a 10.4% stake in the common stock. Since Alden is now part of a group with Smulyan and JS Acquisition to buy out other shareholders, the combined stake amounts to 25.2% of the company’s equity – assuming conversion to Class A of Smulyan’s Class B shares and the 1,162,737 preferred shares owned by the two Alden funds.
What is Alden Global Capital? RBR-TVBR found this description from a financial conference that the company participated in:
“Alden Global Capital is an investment manager established in 2007 by Randy Smith. Alden is a division of Smith Management LLC (the family office of Randy Smith). Alden’s goal is to continue the successful investment program of Randy Smith since 1967 and his targeted investments in distressed debt and emerging markets since 1992. Alden manages the Alden Global Distressed Opportunities Fund which invests primarily in U.S. distressed debt. Alden also manages the Alden Global Emerging Markets Fund, which invests in three regional/country specific strategies. Randy Smith and his affiliates have seeded the Funds with over $500 million. Alden has investment offices in New York, Dubai and Mumbai and employs 7 investment professionals within an organization of over 30 personnel, including a complete legal and operations infrastructure and 24-hour trading.”
According to the SEC filing, the Alden entities and Smulyan began discussing a possible transaction in early April. Those talks apparently moved quickly, since the letter of intent was dated and the deal announced April 26th.