No date has yet been set for a shareholders vote, but Emmis Communications has filed a preliminary proxy with the SEC for the vote on whether to sell the entire company to CEO Jeff Smulyan, who has backing from Alden Global Capital.
The buyout had been delayed by SEC staff questions about documentation for a related exchange offer for Emmis’ preferred stock. Those amended documents have now been filed and it appears that it is all systems go for both tenders to wrap up on July 30th.
The shareholders meeting is really just a formality as far as holders of Class A common shares are concerned. As noted in the preliminary proxy, Smulyan’s super-voting Class B shares give him about 60% of the voting power and the shares owned by Alden add another 1.7%. “Therefore, the Proposed Amendments will be approved by the holders of the Common Stock,” the document notes.
However, the proposed amendments to Emmis’ articles of incorporation also need approval by the preferred holders. The company is using bold face type, underlined, to make it clear to preferred holders that just tendering for the exchange offer does not constitute a vote for the amendments, so they are being urged to return their proxy voting cards. Approval by two-thirds of the preferred shares is required.
As for the offer by Smulyan to buy out all other shareholders at $2.40 per share, the SEC filings reported that 1,335,101 shares had been tendered as of Wednesday, June 30th. In all, he is trying to add 29,722,866 shares to the ones he already owns for a total of 32,910,753.
The SEC filings note that the number of lawsuits filed by shareholders claiming that they are being shortchanged by the deal now stands at seven – six in Indiana state courts and one in US District Court.