sc14d9c
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION
STATEMENT UNDER
SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
EMMIS COMMUNICATIONS
CORPORATION
(Name of Subject
Company)
EMMIS COMMUNICATIONS
CORPORATION
(Name of Person(s) Filing
Statement)
Class A Common Stock, par value $0.01 per share
(Title of Class of
Securities)
291525103
(CUSIP Number of Class of
Securities)
J. SCOTT ENRIGHT
ONE EMMIS PLAZA
40 MONUMENT CIRCLE, SUITE 700
Indianapolis, Indiana 46204
(317) 713-3500
(Name, Address and Telephone
Number of Person Authorized
to Receive Notices and
Communications on Behalf of Filing Person(s) Filing
Statement)
Copy to:
JOHN J. MCCARTHY, JR.
DAVIS POLK & WARDWELL LLP
450 LEXINGTON AVENUE
NEW YORK, NY 10017
(212) 450-4000
|
|
þ |
Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
|
The
following press release was issued by Emmis Communications
Corporation on May 25, 2010.
|
|
|
PRESS RELEASE
|
|
For Immediate Release |
|
|
Tuesday, May 25, 2010 |
|
|
|
|
|
Contact: Patrick M. Walsh |
|
|
Ryan A. Hornaday |
|
|
317-266-0100 |
Emmis Communications Corporation Announces Going Private Merger Agreement
Indianapolis, IN May 25, 2010 Emmis Communications Corporation (Nasdaq: EMMS) announced today
that it has signed a definitive merger agreement which will result in Emmis being taken private by
JS Acquisition, LLC, a company formed by its Chairman and CEO, Jeffrey H. Smulyan. The financing
for the transaction will be provided by an affiliate of Alden Global Capital, a private asset
management company with over $3 billion under management, pursuant to a definitive agreement with
JS Acquisition that was signed last night.
The going private transaction will be effectuated through a cash tender offer for its Class A
Common Stock at $2.40 per Share, an exchange offer of 12% Senior Subordinated Notes due 2017 for
its Preferred Stock, amendments to its Articles affecting the Preferred Stock and a back-end
merger.
The merger agreement, the tender offer, the exchange offer and the Preferred Stock amendments were
unanimously approved today by the Board of Directors of Emmis. Approval of the tender offer and
merger agreement were recommended by a Committee of Disinterested Directors of Emmis.
Under the terms of the merger agreement, JS Acquisition will commence a cash tender offer to
acquire all of the outstanding shares of Class A Common Stock of Emmis for $2.40 per share. Any
Class A Common Stock that is not tendered pursuant to the offer will be cashed out at $2.40 per
share in the back-end merger. The all cash purchase price of $2.40 per share represents a 74%
premium over the 30-trading day average closing price of the Class A Common Stock and a 118%
premium over the 180-trading day average closing price of the Class A Common Stock as of April 26,
2010, the date when Mr. Smulyan and Alden first announced their intention to pursue the
transaction.
The completion of the tender offer will be subject to the condition that the number of shares
validly tendered, when combined with the shares held by JS Acquisition and its investors, including
Mr. Smulyan and Alden, represents at least a majority of the outstanding Class A Common Stock and
Class B Common Stock. The completion of the tender offer is also subject to other conditions,
including the completion and effectiveness
of the amendments to the terms of the Preferred Stock described below, the Alden funding and other
customary conditions.
The merger agreement also requires Emmis to commence an offer to exchange all of its outstanding
Preferred Stock for newly-issued 12% Senior Subordinated Notes due 2017 of Emmis with an aggregate
principal amount equal to 60% of the aggregate liquidation preference (excluding accrued and unpaid
dividends) of the Preferred Stock. In connection with the exchange offer and as a condition to
Emmis accepting shares tendered therein, exchanging holders will be required to consent to (i)
eliminate the provisions of Emmis Articles of Incorporation providing for a redemption, at par
plus accrued and unpaid dividends, in connection with a going private transaction, (ii) provide for
the automatic conversion of any Preferred Stock not exchanged (other than Preferred Stock held by
Alden, which will be converted into Notes) upon the merger into $5.86 (the amount of consideration
that would be paid to holders of shares of Class A Common Stock into which the Preferred Stock was
convertible immediately prior to the merger) and (iii) eliminate the right of holders of Preferred
Stock to nominate directors to Emmis board of directors in certain circumstances. For the
amendments to be effective they must receive the vote of holders of two-thirds of the outstanding
Preferred Stock and more shares of Common Stock must be voted in favor of the Amendments than
against. Alden, which currently holds 41.4% of the Preferred Stock, has agreed to vote in favor of
such amendments and exchange its Preferred Stock for Notes. JS Acquisition and Alden have agreed
to vote their shares of Common Stock in favor; therefore the Common Stock vote will be obtained.
Morgan Stanley acted as financial advisor to the Committee of Disinterested Directors, and Davis
Polk & Wardwell LLP and Barnes & Thornburg LLP served as their legal counsel. Moelis & Company and
BIA Capital Strategies LLC are acting as financial advisors to JS Acquisition. Paul, Weiss,
Rifkind, Wharton & Garrison LLP and Taft Stettinius & Hollister LLP are acting as legal counsel to
JS Acquisition. Alden is represented by Skadden, Arps, Slate, Meagher & Flom LLP and Krieg DeVault
LLP.
About Emmis
Emmis Communications Corporation is a diversified media company, principally focused on radio
broadcasting. Emmis operates the 8th largest publicly traded radio portfolio in the
United States based on total listeners. As of February 28, 2010, Emmis owns and operates seven FM
radio stations serving the nations top three markets New York, Los Angeles and Chicago, although
one of Emmis FM radio stations in Los Angeles is operated pursuant to a Local Marketing Agreement
whereby a third party provides the programming for the station and sells all advertising within
that programming. Additionally, Emmis owns and operates fourteen FM and two AM radio stations with
strong positions in St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis radio
stations located there), Indianapolis and Terre Haute, IN.
In addition to Emmis domestic radio properties, Emmis operates an international radio business and
publishes several city and regional magazines. Internationally, Emmis owns and operates national
radio networks in Slovakia and Bulgaria. Emmis publishing operations consists of Texas Monthly,
Los Angeles, Atlanta, Indianapolis Monthly, Cincinnati, Orange Coast, and Country Sampler and
related magazines. Emmis also engages in various businesses ancillary to Emmis broadcasting
business, such as website design and development, broadcast tower leasing and operating a news
information radio network in Indiana.
Emmis news releases and other information are available on the companys website at www.emmis.com.
IMPORTANT NOTICE: THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE
AN OFFER TO PURCHASE OR THE SOLICITATION OF AN OFFER TO SELL SHARES OF CLASS A COMMON STOCK,
PREFERRED STOCK, NOTES OR ANY SECURITIES OF EMMIS. NEITHER EMMIS NOR JS ACQUISITION HAS COMMENCED
ANY OF THE TENDER OR EXCHANGE OFFERS OR THE SOLICITATION OF PROXIES IN FAVOR OF THE AMENDMENTS TO
THE TERMS OF THE PREFERRED STOCK DESCRIBED HEREIN. THE TENDER AND EXCHANGE OFFERS AND THE PROXY
SOLICITATION WILL BE MADE ONLY PURSUANT TO AN OFFER TO PURCHASE, AN OFFER TO EXCHANGE, A PROXY
SOLICITATION STATEMENT AND THEIR RESPECTIVE LETTERS OF TRANSMITTAL AND OTHER RELATED MATERIALS (THE
DISCLOSURE DOCUMENTS) THAT WILL BE DISTRIBUTED TO EMMIS SHAREHOLDERS AND FILED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (THE SEC). THIS PRESS RELEASE IS NOT A SUBSTITUTE FOR
THE DISCLOSURE DOCUMENTS.
THE TENDER AND EXCHANGE OFFERS AND THE PROXY SOLICITATION WILL ONLY BE MADE PURSUANT TO THE
RESPECTIVE DISCLOSURE DOCUMENTS. SHAREHOLDERS AND INVESTORS SHOULD READ CAREFULLY THE DISCLOSURE
DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE
VARIOUS TERMS OF, AND CONDITIONS TO THE TENDER AND EXCHANGE OFFERS AND THE PROXY SOLICITATION. THE
TENDER OFFER STATEMENT WILL BE FILED BY JS ACQUISITION, LLC, JS ACQUISITION, INC. AND MR. SMULYAN
WITH THE SEC AND THE PROXY SOLICITATION STATEMENT AND OFFER TO EXCHANGE WILL BE FILED BY EMMIS WITH
THE SEC. INVESTORS MAY OBTAIN FREE COPIES OF THE DISCLOSURE DOCUMENTS THAT WILL BE FILED WITH THE
SEC (WHEN AVAILABLE) AT THE SECS WEB SITE AT WWW.SEC.GOV. IN ADDITION, COPIES OF THE DISCLOSURE
DOCUMENTS MAY BE OBTAINED FOR FREE BY DIRECTING SUCH REQUESTS TO THE INFORMATION AGENT FOR THE
TENDER OFFER AND THE EXCHANGE OFFER. SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS
PRIOR TO MAKING ANY
DECISION WITH RESPECT TO THE TENDER OFFER, THE EXCHANGE OFFER AND THE PROXY SOLICITATION.
EMMIS AND ITS DIRECTORS AND OFFICERS AND OTHER MEMBERS OF MANAGEMENT AND EMPLOYEES MAY BE DEEMED TO
BE PARTICIPANTS IN THE SOLICITATION OF PROXIES IN RESPECT TO THE PROPOSED TRANSACTIONS. INFORMATION
REGARDING EMMISS DIRECTORS AND EXECUTIVE OFFICERS IS DETAILED IN ITS PROXY STATEMENTS AND ANNUAL
REPORTS ON FORM 10-K, PREVIOUSLY FILED WITH THE SEC, AND THE PROXY STATEMENT RELATING TO THE
PROPOSED TRANSACTIONS, WHEN IT BECOMES AVAILABLE.
Forward-Looking Statements
This press release includes information that could constitute forward-looking statements made
pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, among others, statements about Emmis beliefs, plans,
objectives, goals, expectations, estimates and intentions that are subject to significant risks and
uncertainties and are subject to change based on various factors, many of which are beyond our
control. The words may, could, should, would, believe, anticipate, estimate,
expect, intend, plan, target, goal, and similar expressions are intended to identify
forward-looking statements. All forward-looking statements, by their nature, are subject to risks
and uncertainties. Although Emmis believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, Emmis actual results could differ materially
from those described in the forward-looking statements.
Emmis ability to achieve its objectives could be adversely affected by the factors discussed in
its Annual Report on Form 10-K for the fiscal year ended February 28, 2010 filed with the SEC, as
well as, among others: (1) the occurrence of any event, change or other circumstances that could
give rise to the inability to complete the transactions described above due to the failure to
satisfy the conditions required to complete the transactions, (2) the outcome of any legal
proceedings that have been and may be instituted against Emmis and others following announcement of
the merger agreement, (3) the ability to recognize the benefits of the transactions, (4) the amount
of the costs, fees, expenses and charges related to the transactions, (5) general industry
conditions such as the competitive environment, (6) regulatory and matters and risks,
(7) legislative developments, (8) changes in tax and other laws and the effect of changes in
general economic conditions, (9) the risk that a condition to closing of the transactions may not
be satisfied, and (10) other risks to consummation of the transactions, including the risk that the
transactions will not be consummated within the expected time period.
Many of the factors that will determine the outcome of the subject matter of this press release are
beyond Emmis ability to control or predict. Emmis undertakes no obligation to revise or update
any forward-looking statements, or to make any other forward-looking statements, whether as a
result of new information, future events or otherwise. Additional information regarding these risk
factors and uncertainties is detailed from time to time in Emmis periodic filings with the SEC,
including but not limited to its Annual
Report on Form 10-K for the fiscal year ended February 28, 2010 filed with the SEC. These filings
are also available for viewing on Emmis website. To access this information on Emmis website,
please visit www.emmis.com and click on Investors, SEC Filings.
The
following communication was issued by Emmis Communications Corporation
to its employees on May 26, 2010.
From: Patrick Walsh
Sent: Wed 5/26/2010 4:25 AM
To: Emmis Domestic Announcements
Subject: Go-Private Transactions
Last evening, Emmis Communications and CEO Jeff Smulyan (through JS Acquisition which was formed
for the purpose of completing the go-private transactions) announced plans to formalize the $2.40
per share offer to purchase Emmis Class A common stock and the offer to exchange Emmis preferred
stock into debt. Earlier this week, Jeff and his investment partner, Alden Global Capital, signed
a definitive agreement for Alden to provide the required financing for the go-private transactions.
Jeff would ordinarily communicate this important information to you, but given his direct
involvement in the transactions, I am pinch hitting for Jeff.
Yesterdays announcement is the next step in the process Jeff and Alden announced on April 26,
2010. I wanted to send you this brief update because Im certain you will read more about the
go-private transactions in various industry trades in the coming days.
Alden Global Capital is a large, multi-billion dollar investment firm with interests in many
companies in various industries, including media. If the proposed transactions are completed, Jeff
will be the majority shareholder, Chairman and CEO of privately-held Emmis and while Alden will
have certain rights as a minority shareholder under the proposed transactions, they will not be
involved in the day-to-day operations of Emmis. The transaction should not result in changes to
how we operate the business.
If you own Emmis common or preferred shares, youll receive more information in the mail on the
proposed transactions in the coming days including instructions on how to tender your shares. In
the event all the proposed transactions are completed, there are several items that will be of
interest to employees:
1. If you hold unvested Emmis stock options with an exercise price less than $2.40, the vesting of
these options will accelerate and at closing the options will be cashed out at $2.40 less your
exercise prices less applicable tax withholding.
2. If you have unvested restricted stock or unvested restricted stock units, the vesting of these
shares or units will accelerate and at closing the shares or units will be cashed out at $2.40 less
applicable tax withholding.
3. If you hold vested or unvested Emmis stock options with an exercise price of $2.40 or more,
these out-of-the-money stock options will be cancelled.
4. If you own Emmis common shares including shares in the 401k plan, shares held by brokers like
Merrill Lynch, or shares held in certificate form, these shares,
if tendered, will be cashed out at $2.40 at the completion of the tender offer. If you do not
tender, your owned shares will be cashed out at $2.40 at closing.
Successful completion of the go-private transactions is estimated to take three months. During
this process and after the process concludes, regardless of the outcome, our work is unchanged:
execute our strategy, hit our budgets and key metrics, and deliver for our listeners, readers and
advertisers. In other words, we will keep you updated, but stay focused on what matters most in
this important rebuilding year for Emmis.
If you are contacted by a shareholder or member of the media, please direct inquiries to me.
Let me know if you have questions.
Pat
Patrick M. Walsh
EVP, Chief Operating Officer and Chief Financial Officer
Emmis Communications
40 Monument Circle, Suite 700
Indianapolis, IN 46204
Office: 317-684-6535
Mobile: 443-745-0259
Fax: 317-684-5580
IMPORTANT NOTICE: THIS COMMUNICATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE
AN OFFER TO PURCHASE OR THE SOLICITATION OF AN OFFER TO SELL CLASS A COMMON STOCK, PREFERRED STOCK,
STOCK OPTIONS, RESTRICTED STOCK, DEBT OR OTHER SECURITIES OF EMMIS. NEITHER EMMIS NOR JS
ACQUISITION HAS COMMENCED ANY OF THE PROPOSED TRANSACTIONS DESCRIBED HEREIN. THE PROPOSED
TRANSACTIONS WILL BE CONSUMMATED ONLY PURSUANT TO AN OFFER TO PURCHASE, AN OFFER TO EXCHANGE, A
PROXY SOLICITATION STATEMENT AND THEIR RESPECTIVE LETTERS OF TRANSMITTAL AND OTHER RELATED
MATERIALS (THE DISCLOSURE DOCUMENTS) THAT WILL BE DISTRIBUTED TO EMMIS SHAREHOLDERS AND FILED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE SEC). THIS COMMUNICATION IS NOT A
SUBSTITUTE FOR THE DISCLOSURE DOCUMENTS.
SHAREHOLDERS AND INVESTORS SHOULD READ CAREFULLY THE DISCLOSURE DOCUMENTS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE
VARIOUS TERMS OF, AND CONDITIONS TO THE PROPOSED TRANSACTIONS. JS ACQUISITION AND EMMIS WILL FILE
THEIR RESPECTIVE DISCLOSURE DOCUMENTS WITH THE SEC. INVESTORS MAY OBTAIN FREE COPIES OF THE
DISCLOSURE DOCUMENTS THAT WILL BE FILED WITH THE SEC (WHEN AVAILABLE) AT THE SECS WEB SITE AT
WWW.SEC.GOV. IN ADDITION, COPIES OF THE DISCLOSURE DOCUMENTS MAY BE OBTAINED FOR FREE BY DIRECTING
SUCH REQUESTS TO THE INFORMATION AGENT FOR THE PROPOSED TRANSACTIONS. SHAREHOLDERS ARE URGED TO
CAREFULLY READ THESE MATERIALS PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE PROPOSED
TRANSACTIONS.
EMMIS AND ITS DIRECTORS AND OFFICERS AND OTHER MEMBERS OF MANAGEMENT AND EMPLOYEES MAY BE DEEMED TO
BE PARTICIPANTS IN THE SOLICITATION OF PROXIES IN RESPECT TO THE PROPOSED TRANSACTIONS. INFORMATION
REGARDING EMMISS DIRECTORS AND EXECUTIVE OFFICERS IS DETAILED IN ITS PROXY STATEMENTS AND ANNUAL
REPORTS ON FORM 10-K, PREVIOUSLY FILED WITH THE SEC, AND THE PROXY STATEMENT RELATING TO THE
PROPOSED TRANSACTIONS, WHEN IT BECOMES AVAILABLE.
Forward-Looking Statements
This communication includes information that could constitute forward-looking statements made
pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, among others, statements about Emmis beliefs, plans,
objectives, goals, expectations, estimates and intentions that are subject to significant risks and
uncertainties and are subject to change based on various factors, many of which are beyond our
control. The words may, could, should, would, believe, anticipate, estimate,
expect, intend, plan, target, goal, and similar expressions are intended to identify
forward-looking statements. All forward-looking statements, by their nature, are subject to risks
and uncertainties. Although Emmis believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, Emmis actual results could differ materially
from those described in the forward-looking statements.
Emmis ability to achieve its objectives could be adversely affected by the factors discussed in
its Annual Report on Form 10-K for the fiscal year ended February 28, 2010 filed with the SEC, as
well as, among others: (1) the occurrence of any event, change or other circumstances that could
give rise to the inability to complete the proposed transactions described above due to the failure
to satisfy the conditions required to complete the proposed transactions, (2) the outcome of any
legal proceedings that have been and may be instituted against Emmis and others following
announcement of the proposed transactions, (3) the ability to recognize the benefits of the
proposed transactions, (4) the amount of the costs, fees, expenses and charges related to the
proposed transactions, (5) general industry conditions such as the competitive environment, (6)
regulatory and matters and risks, (7) legislative developments, (8)
changes in tax and other laws and the effect of changes in general economic conditions, (9) the
risk that a condition to closing of the proposed transactions may not be satisfied, and (10) other
risks to consummation of the proposed transactions, including the risk that the proposed
transactions will not be consummated within the expected time period.
Many of the factors that will determine the outcome of the subject matter of this press release are
beyond Emmis ability to control or predict. Emmis undertakes no obligation to revise or update
any forward-looking statements, or to make any other forward-looking statements, whether as a
result of new information, future events or otherwise. Additional information regarding these risk
factors and uncertainties is detailed from time to time in Emmis periodic filings with the SEC,
including but not limited to its Annual Report on Form 10-K for the fiscal year ended February 28,
2010 filed with the SEC. These filings are also available for viewing on Emmis website. To access
this information on Emmis website, please visit www.emmis.com and click on Investors, SEC
Filings.