It is formerly known as Emmis Communications and was once a formidable operator of radio stations across the U.S. Now known as Emmis Corporation, the publicly traded company founded by Chairman Jeff Smulyan has shared that it has received “overwhelming support” from shareholders to amend its articles of incorporation, as outlined in its proxy statement.
Emmis is going private.
“I am grateful to the Emmis shareholders for their tremendous support of our proposal to amend our articles of incorporation, which will give us the opportunity to return significant capital, invest in our current businesses and seek new ventures,” Smulyan said.
Also at the meeting, shareholders re-elected Emmis board of directors Richard A. Leventhal, Lawrence B. Sorrel, and Michael W. Schechter (Class A Director) and ratified the selection of Ernst & Young LLP as Emmis’ independent auditor for the fiscal year ended February 29, 2024.
The Third Amended and Restated Articles of Incorporation principally permit the redemption of Emmis’ Class A Common Stock at the price of $6.00 per share during the first year following August 29, 2023; $6.50 per share during the second year; and $7.25 per share during the third year, with each price subject to adjustment as specified in the Third A/R Articles.
The Third A/R Articles also require the redemption of the Class A Common Stock if sufficient funds from asset sales and other sources are accumulated in an escrow account during the three-year redemption period to fully fund the applicable redemption price on all Class A Common Stock.
Emmis has two classes of Common Stock, with the Class A Common Stock traded on the OTC Market and the Class B Common Stock solely owned by Emmis’ Chairman, CEO and Founder, Jeffrey H. Smulyan. If all the Class A Common Stock is not redeemed by August 29, 2026, all funds in the escrow account (net of reasonable reserves) would be distributed to shareholders either as a dividend or through a partial redemption of the Class A Common Stock.
Translation: Emmis has a three-year window to go private.
As a condition to the adoption of the proposed amendments, Smulyan has entered into a voting agreement pursuant to which he has relinquished his right to block a liquidation of the company if all the Class A Common Stock has not been redeemed by August 29, 2026.
Previously, Emmis’ board of directors declared a special dividend of $0.50 per share of common stock that will be paid on September 22, to all holders of record of Emmis’ Common Stock as of September 13, 2023.
— With information from PR Newswire
