Owner of KGMB seeks to go private
The Emmis buyout is not expected to stop the planned sale of the local television station
By Ashley M. Heher
Associated Press
INDIANAPOLIS » Media groupEmmis Communications Corp., which is planning to sell KGMB in Honolulu, said yesterday that its chairman and chief executive has proposed buying out the company.
Jeffrey H. Smulyan's offer for Emmis' publicly held common shares values them at $567 million.
Smulyan, who already owns nearly 17 percent of the company, made a nonbinding offer of $15.25 in cash for each Emmis common share, a 13.6 percent premium over Friday's closing price of $13.43, the company said.
But Emmis shares traded well above that level, soaring $2.82 to close at $16.25 in trading on the Nasdaq Stock Market.
Smulyan's announcement has no impact on Emmis' plans to sell KGMB in Honolulu and sister station WVUE in New Orleans, according to Jodi Wright, internal communications coordinator for Emmis.
"There's really no change in our intention for the TV stations ... We are still seeking and discussing selling the remaining two stations," she said.
Smulyan, a former owner of the Seattle Mariners, lost a bid last week to purchase the Washington Nationals baseball team. Company officials said in a statement that he also plans to refinance some of Emmis' outstanding debt and preferred stock.
Through a spokesman, Smulyan declined to comment.
The board of Indianapolis-based Emmis formed a special committee of independent directors to consider the proposal.
The committee will pick independent financial and legal advisers. Smulyan and the other directors who are members of management will not participate in the evaluation.
Smulyan's proposal yesterday, which comes through a company owned by Smulyan calledECC Acquisition, requires the special committee's recommendation and board approval.
Smulyan owns about 16.9 percent of Emmis' shares. He said he will not agree to any other transaction involving Emmis or his shares.
Indiana-based Emmis originally bought KGMB as part of a $562.5 million, 15-station purchase of television stations from Iowa-basedLee Enterprises Inc. in a deal announced in 2000. Before the deal, Emmis was and remains primarily an owner and operator of radio stations and a publisher of regional and local magazines.
Separately yesterday, Emmis said it plans to sell WKCF in Orlando, Fla., to Hearst-Argyle Television Inc. for $217.5 million in cash. Emmis will continue to own half of "The Daily Buzz," a syndicated weekday news program produced in the WKCF studios, with partner ACME Communications, and will retain the WKCF building.
Since May 2005, Emmis has found buyers for 14 of its television stations.
Also yesterday, Emmis agreed to sell KKFR-FM of Phoenix for $77.5 million toBonneville International Corp.andBonneville Holding Co. After that deal closes, Emmis will own 23 domestic radio stations in seven markets.
Emmis also publishes lifestyle magazines including Texas Monthly, Los Angeles and Country Sampler.
The company earned $349.4 million after preferred dividends in 2005 versus a loss of $313.4 million in 2004. Revenue grew to $387.4 million in 2005 from $351.8 million in the previous year.
Star-Bulletin reporter Erika Engle contributed to this report