Emmis Announces Intention to Commence Dutch Auction Tender Offer
Emmis also Announces that It Will Explore Strategic Alternatives for the
Company’s Television Assets
INDIANAPOLIS, May 10 /PRNewswire-FirstCall/ — Emmis Communications
Corporation (Nasdaq: EMMS) announced today that its Board of Directors has
approved a “Dutch Auction” tender offer to purchase up to 20,250,000 shares of
its Class A common stock at a price per share not less than $17.25 and not
greater than $19.75. The mid-point of this range represents approximately a
20% premium to the closing price per share of the Class A common stock of
$15.45 on the Nasdaq National Market on May 9, 2005.
Separately, Emmis announced that it has engaged The Blackstone Group as
its financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as its
legal counsel to assist in evaluating strategic alternatives for the Company’s
television assets. This process could result in a decision to sell all or a
portion of its television assets. Banc of America Securities LLC, Deutsche
Bank Securities Inc. and J.P. Morgan Securities Inc. are also advising the
Company with respect to its television business.
Jeffrey H. Smulyan, the CEO, President and Chairman of the Board of Emmis,
said, “Our decision to explore strategic alternatives for our television
assets comes from our ongoing dedication to lowering our debt and putting us
in a better position for growth, but also from the recognition that, in order
to reach their full potential, our television stations need to be aligned with
a company that is larger and more singularly focused on the challenges of
American television. Our television employees have proven themselves to be the
best operators in American television, and they deserve the opportunity to
continue the good work they’ve done in the last seven years.”
The number of shares of Class A common stock proposed to be purchased in
the Dutch Auction tender offer represents approximately 39% of the outstanding
shares of Class A common stock and approximately 36% of the outstanding shares
of Class A and Class B common stock. The tender offer is expected to commence
within 7 days.
The purchase will be financed from a combination of new borrowings under
Emmis’ existing credit facility and new financing. As a result, the tender
offer will be subject to the receipt of debt financing on terms and conditions
satisfactory to Emmis, in its reasonable judgment, in an amount sufficient to
purchase the Class A shares in the tender offer and to pay related fees and
Smulyan, Emmis’ largest shareholder, has advised Emmis that he does not
intend to tender any shares beneficially owned by him.
Under the procedures for a Dutch Auction tender offer, Emmis’ shareholders
will have the opportunity to tender some or all of their Class A shares at a
price within the $17.25 to $19.75 range per share. Based on the number of
Class A shares tendered and the prices specified by the tendering
shareholders, Emmis will determine the lowest per-share price within the range
that will enable it to buy 20,250,000 Class A shares, or if a lesser number of
Class A shares are properly tendered, all Class A shares that are properly
tendered and not withdrawn. All Class A shares accepted in the tender offer
will be purchased at the same determined price per share regardless of whether
the shareholder tendered at a lower price. Shareholders whose Class A shares
are purchased in the offer will be paid the determined purchase price net in
cash, without interest, after the expiration of the offer period. The offer
is not contingent upon any minimum number of Class A shares being tendered.
The offer is subject, however, to a number of other terms and conditions that
will be described in the offer to purchase to be distributed to shareholders.
Neither Emmis nor its Board of Directors is making any recommendation to
shareholders as to whether to tender or refrain from tendering their Class A
shares into the tender offer. Shareholders must decide how many Class A
shares they will tender, if any, and the price within the stated range at
which they will offer their Class A shares for purchase by Emmis.
In addition, Emmis announced today that its Board of Directors has
authorized a share repurchase program to be made effective after the
completion of the tender offer. The share repurchase program would permit
Emmis, to the extent that it does not purchase 20,250,000 Class A shares in
the tender offer, to purchase up to a number of Class A shares equal to the
shortfall plus an additional number of Class A shares equal to 5% of the total
outstanding shares after the tender offer. Whether or to what extent Emmis
chooses to make such purchases will depend upon market conditions and Emmis’
capital needs, and there is no assurance that Emmis will conclude such
purchases for any or all of the authorized amounts remaining. No such
purchases will be made by Emmis before or during the pendency of the tender
offer or for at least 10 business days following termination of the offer.
The dealer managers for the tender offer will be Banc of America
Securities LLC and Deutsche Bank Securities Inc. and the information agent
will be Georgeson Shareholder Communications, Inc. The depositary will be
Wachovia Bank, N.A. Emmis has also retained Paul, Weiss, Rifkind, Wharton &
Garrison LLP to act as its legal counsel in the tender offer. When the tender
offer is commenced, the offer to purchase and related documents will be mailed
to holders of record of Class A shares and also will be made available for
distribution to beneficial owners of Class A shares. For questions and
information, please call the information agent toll free at (866) 399-8748.
Emmis will host a conference call to discuss the Dutch Auction tender offer
and the exploration of strategic alternatives for its television assets.
Emmis Chairman/Chief Executive Officer Jeff Smulyan and Executive Vice
President/Chief Financial Officer Walter Berger will host the call.
To access this conference call, please dial 1.517.623.4891, or listen
online at https://www.emmis.com.
DATE/TIME Tuesday, May 10, 2005
Eastern 11 a.m.
Central 10 a.m.
Mountain 9 a.m.
Pacific 8 a.m.
CALL NAME/PASSCODE Emmis
Call LEADERS Jeff Smulyan and Walter Berger
CALL PLAYBACK A digital playback of the call will be available through
Tuesday, May 17, by dialing 1.203.369.3617.
Investors have the opportunity to listen to the conference call over the
Internet through the Emmis site, https://www.emmis.com. To listen to the live
call, please go to the website at least fifteen minutes early to register,
download, and install any necessary audio software.
If you have any questions or need further clarification, please
contact:Kate Snedeker, Media & Investor Relations, 317.684.6576,
Emmis Communications – Great Media, Great People, Great Service (R)
Emmis Communications is an Indianapolis-based diversified media firm with
radio broadcasting, television broadcasting and magazine publishing
operations. Emmis owns 23 FM and 2 AM domestic radio stations serving the
nation’s largest markets of New York, Los Angeles and Chicago as well as
Phoenix, St. Louis, Austin, Indianapolis and Terre Haute, IN. In addition,
Emmis owns a radio network, international radio stations, 16 television
stations, regional and specialty magazines and ancillary businesses in
broadcast sales and book publishing.
The television assets of Emmis include the following 16 stations: WKCF-TV,
WB 18 in Orlando, FL; KOIN-TV, CBS 6 in Portland, OR; WVUE-TV, FOX 8 in New
Orleans; KRQE-TV, CBS 13 in Albuquerque, NM; WSAZ-TV, NBC 3 in
Huntington/Charleston, WV; WALA-TV FOX 10 and WBPG-TV WB 55 in Mobile,
AL/Pensacola, FL; KSNW-TV, NBC 3 in Wichita, KS; WLUK-TV, FOX 11 in Green Bay,
WI; KGUN-TV, ABC 9 in Tucson, AZ; KGMB-TV, CBS 9 and KHON-TV, FOX 2 in
Honolulu; KMTV-TV, CBS 3 in Omaha, NE; WFTX-TV, FOX 4 in Ft. Myers, FL; KSNT-
TV, NBC 27 in Topeka, KS; and WTHI-TV, CBS 10 in Terre Haute, IN.
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT
CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL SHARES OF
EMMIS CLASS A COMMON STOCK. EMMIS HAS NOT YET COMMENCED THE TENDER OFFER
DESCRIBED HEREIN. THE TENDER OFFER WILL BE MADE ONLY PURSUANT TO THE OFFER TO
PURCHASE AND RELATED MATERIALS THAT EMMIS WILL BE DISTRIBUTING TO ITS
SHAREHOLDERS. SHAREHOLDERS AND INVESTORS SHOULD READ CAREFULLY THE OFFER TO
PURCHASE AND RELATED MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS AND INVESTORS MAY OBTAIN A FREE
COPY OF THE TENDER OFFER STATEMENT ON SCHEDULE TO, THE OFFER TO PURCHASE AND
OTHER DOCUMENTS THAT EMMIS WILL FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION (WHEN AVAILABLE) AT THE COMMISSION’S WEB SITE AT WWW.SEC.GOV.
SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS PRIOR TO MAKING ANY
DECISION WITH RESPECT TO THE OFFER.
Certain statements included above which are not statements of historical
fact, including financial data for quarters or other periods that are not yet
completed and statements identified with the words “continues,” “expect,”
“will,” or “would,” are intended to be, and are, identified as “forward-
looking statements,” and involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of Emmis to be materially different from any future result, performance or
achievement expressed or implied by such forward-looking statements. Such
factors include, among others, general economic and business conditions;
fluctuations in the demand for advertising; increased competition in the
broadcasting industry including the implementation of competing formats in
large markets; the attraction and retention of quality talent and other
programming; public and governmental reaction to Emmis programming decisions;
changes in the costs of programming; changes in interest rates; inability to
grow through suitable acquisitions, including the desired radio; inability or
delay in closing acquisitions or dispositions; terrorist attacks or other
large-scale disasters; wars and other events creating economic uncertainty;
and other factors mentioned in documents filed by Emmis with the Securities
and Exchange Commission. Furthermore, there can be no assurance that Emmis
will be able to reach a definitive agreement with potential buyers of its
television assets or that such transactions, if agreed, could be consummated
or on what terms. Emmis does not undertake any obligation to publicly update
or revise any forward-looking statements because of new information, future
events or otherwise.