Betting on EMMS Merger Investing Arbitrage

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Jae Jun of Old School Value has an interesting take on the whole EMMS merger investing arbitrage situation.

While he makes some valid points I disagree with some of them. First off let me disclose that I am still retaining my position in EMMS and have voted to tender the shares.

Should the tender not work, I'm not seeing much further downside in this stock as the activists could very well be getting Mr. Smulyan to offer a higher bid. It's clear that Jeff Smulyan is very willing to take the company private - the question is are we reading his hand correctly?

I believe that he is willing to pay more than the 2.40 if there is dissent from the activists. Of course this is merely speculation as we don't have a view of Mr. Smulyan's hand.

Only time will tell but the tender deadline of August 2 is quickly approaching. I'm holding my shares and will ride this one out. The potential further upside is potentially huge.

Disclosure: Author has a position in EMMS acquired at 2.19

Comments

asues said…
I'm long EMMS as well. Still some uncertainty with the common shareholder lawsuits as well.

Preferred shareholders seem to have substantial upside even at the current offering. Loeb of Third Point Capital only recently purchased his preferred - I think he's angling to boost the return.

Smulyan has tried before and I think he has a vested interest in seeing this transaction go through.

You can read my posts on the situation here:

http://www.valueuncovered.com/emms-going-private-transaction

http://www.valueuncovered.com/emmis-transaction-derailed-but-for-good
July 23, 2010 at 11:35 PM
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