When you say, "continuing on, as an independent operating entity", do you expect Emmis to accrue (or pay) 22% interest on the $35MM that it borrowed from the Zell fund?
My thinking goes like this: If they wanted to continue operating as is, they could have borrowed from Zell and simply bought Alden's preferred shares and all the preferreds they could get in the open market. Instead, they are engaging in this total return swap with the holder agreeing to vote according to Emmis' instructions.
What the %$#@ are they voting on?
Smulyan knows he can find a fund or company to take Emmis private or merge it with another media company if the "ugly" preferred blocking vote is taken care of.
My guess is - a partnership or merger announcement is forthcoming.
I agree with your take. That's just my gut sense. The CEO tried to take it private in 2006. He tried to take it private last year. If they get to the point where they can get the vote on 66.67% of the preferred (almost certainly, the delay of getting that 66.67%, last year, is what killed the going private transaction back then!) and control the outcome, largely, on what happens to the rest of the preferred, that would make it all the more enticing for Jeff to come in and make a bid...ESPECIALLY if the stock is still trading at these absurdly low levels.
I'm extraordinarily surprised the market hasn't priced in a higher possibility of a revisting of a going private transaction, in the coming months, and the stock isn't trading for at least $1.00-1.10, at this point. Simply for the reason that, even if we do NOT see that (a proposed transaction), with the elimination of so much of the preferred, "on the cheap," the value of what remains for Emmis's common holders is so dramatically much higher....should it remain as a going concern.