'American Idol' Owner CKX to Be Sold to Financial Firm for $509 Million
CKX also owns "So You Think You Can Dance"producer 19 Entertainment, Elvis Presley and Muhammad Ali rights.
NEW YORK -- CKX Inc., owner of American Idol and So You Think You Can Dance producer 19 Entertainment, said Tuesday it has agreed to be acquired by an affiliate of financial firm Apollo Global Management.
CKX also owns the rights to the likeness and names of Elvis Presley and Muhammad Ali.
The deal, which will take CKX private, values the company at about $509 million when multiplying the acquisition price with the number of outstanding company shares listed by Bloomberg.
In a statement, the companies said the deal will provide "additional resources and expertise to support growth of iconic brands."
Aaron Stone, a senior partner at Apollo, said: "CKX owns a portfolio of irreplaceable assets that present a strong foundation on which to build an exciting future."
CKX had in recent years repeatedly looked at a possible sale, but never reached an agreement. Among its suitors have been CKX founder Robert Sillerman, who stepped down as chairman and CEO last year to pursue an unsuccessful bid, but has continued to own a stake of about 21 percent in the company, and Idol creator Simon Fuller. The two also tried a going-private deal together several years ago. Last fall, management said that CKX was officially off the market though,
Under the terms of the Apollo deal, CKX shareholders will receive $5.50 in cash for each share that they hold, representing an approximately 40 percent premium over CKX's average closing price over the past six months and an approximately 25 percent premium over the closing price of $4.45 on Monday. Sillerman had last year explored a $5.50-$5.75 deal for a majority stake in the firm, but its stock was then trading higher.
Apollo has obtained support from two significant stockholders, The Promenade Trust, the sole beneficiary of which is Lisa Marie Presley and which is the Company's partner in Elvis Presley Enterprises, and Sillerman, the company's largest shareholder.
Chairman and CEO Michael Ferrel said: "We look forward to working with Apollo, a growth-oriented investor who has a successful history of investing in the media and entertainment sector and one that the board and management team are confident will serve as a strong steward for the company's brands going forward. The transaction allows CKX stockholders to realize significant value from their investment in the company and the board has determined that the transaction is advisable, fair and in the best interest of the company's public stockholders."
The deal news came after the company had reported its first-quarter financials late Monday.
CKX shares gained 22.7 percent to end the day at $5.46, near the takeover price.