Posted by chicagomedia.org on August 25, 2008 at 09:23:48:
Spanish Broadcasting System revealed late Friday (Aug. 22) after the stock market closed that it had received a delisting notice from the Nasdaq Stock Market on Aug. 20, two days earlier. The letter notes that Spanish Broadcasting’s SBSA stock, traded on Nasdaq, is not in compliance with the minimum bid price because the bid share price for common stock has closed below a dollar for the past 30 consecutive days.
On Friday, Aug. 22, shares of SBSA closed up a fraction of a penny at 51 cents apiece as 260,566 shares traded hands, more than the usual 189,000 shares a day.
Radio & Records reported Aug. 15 that there was a good possibility that the Coconut Grove, Fla.-based Hispanic-targeting group would be subject to such Nasdaq sanctions since its share price had been hovering just above half-a-dollar for weeks.
The company’s executive suite has been under fire for nearly a year by the Discovery Group. The Chicago-based merchant bank which owns 4 million or 9.8% of SBSA shares has accused the company’s executives of “mismanagement, poor operating performance [and] excessive executive compensation,” and added, “weak governance is not acceptable,” according to a letter it filed in May with the Securities and Exchange Commission. In earlier letters, the Chicago bank withheld its votes for the reelection of Spanish Broadcasting’s directors at the company’s annual meeting on June 3, 2008.
In a strongly worded seven-page letter written in early March and also filed with the SEC, Discovery Group managing partner Daniel Donoghue told the broadcaster’s board of directors, “It is imperative that the board form a special committee comprised of truly independent directors and empower the committee to hire a nationally recognized investment banking firm for the purpose of evaluating the [above-mentioned] alternatives.”
Donoghue said he was “writing to express our grave concerns regarding the severe and steady erosion in shareholder value that has occurred since the company went public eight years ago.” Donoghue noted that “senior officials of Discovery” have met with management of SBS “numerous times over the past few years to discuss these concerns” and that it had presented “several tangible, value-restoring opportunities” that it uncovered, including a suitor “for a highly strategic industry merger,” but that management was “unresponsive” to both the concerns over value and the possible merger.
Spanish Broadcasting, which owns and/or operates 21 radio stations in the top Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, including the No. 1 Spanish-language radio station in America's largest market, WSKQ-FM in New York City, and a popular TV station in South Florida, was founded by Pablo Raul Alarcon, a Cuban refugee who died June 11, 2008, in Miami at age 82. Until his death, Alarcon sat on the board of SBS and was the company's president emeritus. His only son, Raul Alarcon Jr., is president of the company.
The company said it “intends to use all reasonable efforts to maintain the listing of its common stock on the Nasdaq Global Market, but there can be no guarantee that the company will regain compliance with the continued listing requirements.” SBSA will be given 180 calendar days, or until February 17, 2009, to regain compliance with the $1 rule. It will have to maintain a closing price at or above $1.00 per share for at least 10 consecutive business days.
Nasdaq has penned a similar letter to other radio companies recently. Radio One got a delisting notice at the end of May and was in emergency meetings for two days beginning Aug. 14, attempting to push its shares above a dollar. Cincinnati-based Regent Communications revealed on Aug. 15 that it also received such a letter on Aug. 11. Shares of Radio One’s RIOAK closed down 3 cents, at 94 cents a share, while Regent’s RGCI shares were down 3 cents at 80 cents a share.
(R&R)