It would sure be nice if the two parties could come to reasonable terms. Unfortunately, we know from history, when the CEO had been interested in taking the company private in 2010, that the preferred stock lockup group delayed the deal, by wanting too much money, and ended up causing Alden to walk away, when conditions in the financing, and stock market, deteriorated. As a result, they lost out, and a ton of legal expenses were incurred, all for nought.
Now, Emmis is in the driver's seat, and yet the preferred holders are apparently still thinking this is like 2010.
I wish they would have learned their lesson the first time. When 2/3 of the preferred stock was bought in for about $16, a few months back, the notion that a dramatically higher number is going to be provided to those that remain is unrealistic.
My own notion is that the right range to settle with the remaining holders is somewhere between $22-25 (a full 50%+ premium over what most everybody else got) but I guess I'm foolish for expecting cooler heads to prevail.
Now, the preferred holders will have themselves in a position where they will have to fight to stop Emmis...or, I guess, just accept the newly revised terms grudgingly, and hope that the resulting moves that Emmis may make, will benefit, perhaps, both preferred and common. But it's not like I'd imagine that management will go out of its way to seek out a new bank agreement, that allows the company to resume paying preferred dividends when, in all reality, the preferred holders appear unwilling to give a little to get a little.
All of the above is my supposition and intuitive take on the situation. I have no special knowledge of any kind.
In the meantime, the CEO has made it clear that a value unlocking buyout is "not in the cards" (per earnings conf. call), obviously, because of the hassles that were involved a couple years ago. No one is interested in subjecting themselves to the kind of self-flaggelation that was involved in multiple rescheduled special meetings. It was only when the lockup group, apparently, panicked, a couple years ago, as radio stocks were collapsing, and decide to be prudent and come to terms with Emmis. But by then, it was too late, and Alden was done.
Will they make a similar miscalculation this time, and end up with an "orphan" security that has no bonafide liquid market?
This could, and should, readily be a win-win situation for both sides. But, apparently, it's increasingly looking like it's going to be one of brinksmanship.
IF you REALLY feel this way, then you should vote no with your shares on at least one line item. IF it ever actually goes to voting. Not something to stop it from passing, but a single item that you feel isn't right. I don't think the lockout group wants full payment (although according to the CC they have had discussions so they should know what they're asking for), but the $16 was a bit low.
At 23% interest on the $35M million borrowed from Sam Zell, brinkmanship is going to become expensive quick. EMMS could solve so many of its' problems by simply concentrating on improving sales and gross markup.