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Emmis Communications Corp. Message Board

  • longtimefollower longtimefollower Jul 16, 2011 7:32 PM Flag

    Annual meeting.

    Not too much to report, that wasn't in the conf. call. As per the call, the company expects to be able to refinance its debt, once the Merlin money comes in. It also seems clear that they are looking to take advantage of some of the opportunities out there in the media space. (My perception is that they may be more interested now in finding a financial partner, remaining public, and using the "new money" as a means of growing the business and picking up some attractive assets...rather than reexploring the notion of taking the company private again.)

    I'd love to see them execute a transaction to complete the sale of the L.A. station to Grupo Radio. One would think that the terms of any refinancing would be a lot better, if that station were sold. (Reducing EMMS's debt from $330 to $220 with the Merlin deal is great...but reducing it to $110 M or so, with Grupo Radio, would be even better.) One wonders if they could offer a 5% discount, or something like that, to "induce" Grupo Radio to close on a sale sooner, rather than later.

    Personally, I still think the Street is underappreciating the "embeded value" in EMMS, considering how much more manageable debt will be, whenever the company closes on L.A.. (Factoring in the value of the Merlin pfd. stock, and equity interest in Merlin, along with a sale of L.A., EMMS would be pretty close to debt free...exclusive of the pfd. stock, of course.)

    Are the remaining assets (exclusive of the 3 stations to be sold to Merlin, and L.A.) only worth the value of the pfd. stock??

    The CEO apparently thought otherwise, when he came in to buy the common stock at $2.40 a year ago. And that common stock will obviously be worth MORE than that, with a refinanced EMMS.

    The stock won't stay down at $1 forever. I'll say that. I'm still thinking this will see $3-5 in 1-2 years.

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    • Looking at the Grupo Radio 20-F, it looks like they are losing pretty good money on operating EMMS's L.A. station I would think that means it would be hard for them to find any kind of financing to facilitate their completing the purchase from EMMS any time soon, unfortunately. (But I hope I'm wrong.)

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