The preferred shareholders walked from a $30 note and showed a ton of backbone last year. Now there are two preferred shareholders on the board. Would be shocked if a lot of preferred shareholders tender remotely near these levels. But those who do will help build value for the remaining preferred shareholders just like those banks who tendered early in the restructuring helped build value for the other banks (and preferred shareholders).
Valuing company at 8 times 35 million of expected EBITDA is 280 million
less 115 million(ish) of net debt
leaves 165 million of value to preferred plus another $30 million plus for real estate value. Then you need to also factor in the value of Merlin and the value of money losing businesses which Emmis is investing in before they are profitable. Preferred "outstanding" is 2.8 million shares which yields a value available for preferred of close to $70 per preferred share, which is more than enough to cover the amount of preferred outstanding and accrued and unpaid dividends.
Of course this also neglects to take into account the way the company will look post all financial re-engineering. 150 million of debt at something like a 7% interest rate will generate $10.5 million of cash interest expense. Company should have $25 million per year of additional cash generation to pay off the preferred dividends or to retire debt if covenants restrict them. In meantime preferred is up from $50 to 60+/share of book value because its cumulative.
Will be most interesting to see where alden is in all of this. Last year alden (presumably) wasn't cooperating with the preferred holders...This year i would imagine they will be focused on their preferred shares and maximizing that value...unless of course they were the ones who arranged the "sale" of their shares.
I am cynical about share sales in the press release since the 8-kdoesn't mention amounts etc but I guess we will find out (soon?).