Smulyan's private victory.Media entrepreneurs who dream of taking their company public should consider the career trajectory of Jeffrey Smulyan, chief executive at Emmis Communications Emmis Communications (NASDAQ: EMMS) is a media conglomerate based in Indianapolis, Indiana. The company owns radio and television stations and magazines in the United States, Belgium, Hungary and Slovakia. Corp. The Indiana-based businessman announced a plan last week to take his company private. After earning a law degree from USC An abbreviation for U.S. Code. , Smulyan ran radio stations in Indianapolis and Omaha. He founded Emmis in 1980 and went public in 1994. The company grew to include 25 radio stations, 16 TV stations, and six regional magazines. Here in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Emmis owns KPWR-FM (106) and country music station KZLA-FM (93.9), plus Los Angeles and Tu Ciudad magazines. Along the way, Emmis owned Major League Baseball's Seattle Mariners The Seattle Mariners are a professional baseball team based in Seattle, Washington. The Mariners are a member of the Western Division of Major League Baseball's American League. From to the present, the Mariners have played in Safeco Field. for two seasons and last year offered to buy the Washington Nationals This article is about the current Major League Baseball team. For other uses, see Washington Nationals (disambiguation). The Washington Nationals are a professional baseball team based in Washington DC. . So why take a textbook success private? Because Smulyan feels the world doesn't appreciate his creation, and he may be right. At least the supposed rationality of the market doesn't seem to work here. Before the announced buy-out, Emmis stock traded for $13.43. Smulyan offered $15.25 a share, but the price quickly jumped to $16.25 based on the conventional wisdom that an opening offer is a low ball. Then the market reacted with confusion. Lehman Bros BROS Brothers BROS Benefits and Retirement Operations Section (King County, Washington) BROS Barnes and Richmond Operatic Society (London, UK) . analyst Anthony DiClemente recommended that clients sell into the strength of a $16 share price. Bear Steams upgraded the stock to "outperform" and set a target price of $17.50. It all comes down to valuation. Smulyan's offer values Emmis at $567 million. Subtract A relational DBMS operation that generates a third file from all the records in one file that are not in a second file. the 20 percent of the company he already owns, and he would have to spend $453 million to own Emmis outright. In addition, the company has $792 million in debt and $140 million in cash. On the same day the company announced Smulyan's offer, it sold an Orlando TV station for $217.5 million and a Phoenix radio station for $77.5 million. Throw those numbers in and it turns out Emmis would need to fetch about $810 million to justify Smulyan's offer. The company still owns 23 radio stations, two TV stations and four magazines. Are they worth $810 million? It looks like a reasonably safe bet. Sometimes the glory of going public isn't worth the price. The true entrepreneur prefers the private satisfaction of a well-stocked bank account. |
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