JS Acquisition and Alden Global Capital Announce Letter of Intent Regarding Going Private Transaction of Emmis Communications

INDIANAPOLIS, April 26 /PRNewswire/ -- JS Acquisition, Inc. ("JS Acquisition") and Alden Global Capital ("Alden") today announced that they have entered into a Letter of Intent pursuant to which JS Acquisition intends to purchase all shares of Class A common stock of Emmis Communications Corporation ("Emmis"; Nasdaq: EMMS) (excluding shares owned by JS Acquisition, Mr. Jeffrey H. Smulyan and his affiliates) at a price per share of $2.40.  The consideration offered for Emmis' Class A common stock represents a 74% premium over the 30-trading day average closing price of the Class A Common Stock and a 118% premium over the 180-trading day average closing price of the Class A Common Stock.  Alden Global Capital is a private asset management company with over $3 billion under management.

The Letter of Intent also contemplates an offer to exchange all of the outstanding shares of preferred stock of Emmis (the "Preferred Stock") for newly-issued 12% senior subordinated notes due 2017 of Emmis (the "Debt") with an aggregate principal amount equal to 60% of the aggregate liquidation preference (excluding accrued and unpaid dividends) of the Preferred Stock.  The consideration offered for the Preferred Stock represents a 73% premium over the 30-trading day average closing price of the Preferred Stock and a 133% premium over the 180-trading day average closing price of the Preferred Stock.  The exchange offer is expected to be exempt from registration under the Securities Act of 1933 pursuant to Section 3(a)(9).  In connection with the exchange offer, exchanging holders will be required to consent to (i) eliminate Section 11 of Exhibit A to Emmis' Articles of Incorporation (providing for a Going Private Redemption), (ii) provide for the automatic conversion of the Preferred Stock upon a merger into that amount of consideration that would be paid to holders of shares of the Class A Common Stock into which the Preferred Stock was convertible immediately prior to the merger, and (iii) eliminate the right of the holders of the Preferred Stock to nominate directors to Emmis' board of directors.  Alden, which currently holds 42% of the Preferred Stock, has agreed to consent to such amendments and exchange its Preferred Stock for Debt.

Upon completion of the Transactions, Mr. Smulyan will hold substantially all of a new class of voting common stock of Emmis and Mr. Smulyan and his affiliates will hold all of the outstanding common stock of JS Acquisition.  JS Acquisition will own all of a new class of non-voting common stock of Emmis that will represent substantially all of the outstanding equity value of Emmis.  Alden has agreed to purchase $80 million principal amount of Series A Convertible Redeemable PIK Preferred Stock of JS Acquisition and will receive nominally-priced warrants in connection therewith.

The completion of the Transactions is subject to certain conditions including (i) receipt of all required stockholder approval of the Transactions, (ii) the exchange of 66 2/3% of the Preferred Stock, (iii) the completion and effectiveness of the amendments to the terms of the Preferred Stock, (iv) the satisfaction of applicable regulatory requirements, (v) the Emmis board of directors waiving certain provisions of the Indiana Business Corporations Law and agreeing to submit any required merger directly to the Emmis stockholders for approval without the Board's recommendation of the merger, (vi) the execution of definitive documentation, (vii) simultaneous completion of all parts of the Transactions and (vii) other customary conditions.

Moelis & Company is acting as financial advisor to JS Acquisition and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to JS Acquisition.  Alden is represented by Skadden, Arps, Slate, Meagher & Flom LLP.

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL SHARES OF EMMIS CLASS A COMMON STOCK, EMMIS PREFERRED STOCK, THE DEBT OR ANY SECURITIES OF JS ACQUISITION. NEITHER EMMIS NOR JS ACQUISITION HAS COMMENCED ANY OF THE TENDER OR EXCHANGE OFFERS DESCRIBED HEREIN. THE TENDER AND EXCHANGE OFFERS WILL BE MADE ONLY PURSUANT TO OFFERS TO PURCHASE AND RELATED MATERIALS THAT WILL BE DISTRIBUTED TO EMMIS' SHAREHOLDERS. SHAREHOLDERS, AND INVESTORS SHOULD READ CAREFULLY THE OFFERS TO PURCHASE AND RELATED MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS. INVESTORS MAY OBTAIN A FREE COPY OF THE TENDER OFFER STATEMENTS ON SCHEDULE TO, THE OFFERS TO PURCHASE AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (WHEN AVAILABLE) AT THE COMMISSION'S WEB SITE AT WWW.SEC.GOV. SHAREHOLDERS ARE URGED TO CAREFULLY READ THESE MATERIALS PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFERS.

In connection with any solicitation of the stockholders of Emmis and in connection with the Transactions, a proxy statement, solicitation statement, registration statement and/or other disclosure documents (any of the foregoing, "disclosure documents") may be filed with the SEC, and would be mailed to Emmis stockholders. This press release is not a substitute for any disclosure documents, including without limitation any proxy statement or solicitation statement or registration statement that may be filed with the SEC and sent to Emmis stockholders in connection with any solicitation of Emmis stockholders or any business combination transaction with Emmis. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ANY SUCH DISCLOSURE DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. INVESTORS AND SECURITY HOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF ANY SUCH DOCUMENTS FILED WITH THE SEC THROUGH THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.

SOURCE JS Acquisition, Inc.