CKx Agrees to Settle Lawsuits Over Planned Sale
NEW YORK - American Idol owner CKx Inc. said Tuesday that it has agreed in principle to resolve a consolidated class action related to the pending approximately $510 million acquisition of the company by private equity firm Apollo Global Management.
It didn't detail the financial impact, but said that the plaintiffs' attorneys are expected to apply for an award of attorneys' fees and expenses to be paid by CKx.
The company, which through its 19 Entertainment also produces So You Think You Can Dance and also owns rights to the name and likeness of Elvis Presley and Muhammad Ali, recently disclosed legal challenges that argued it failed to secure a fair price for its shareholders.
"Upon approval of the settlement by the court, all claims asserted in the litigation in Delaware and one additional claim asserted in the Supreme Court of the State of New York will be dismissed with prejudice," the company said Tuesday.
Under the proposed settlement, the amount due in the event that a deal termination fee is payable will be $17.5 million instead of the previously disclosed $20 million. CKx would have to pay that fee to Apollo if the company found another buyer.
CKx also agreed to two other tweaks of the merger proposal. One is the definition of a "superior proposal." The other change is that the tender offer for CKx shares for $5.50 each will be extended by one day to 12:00am New York City time on June 15.
CKx has also amended a statement to include additional disclosures sought by the plaintiffs, it said.
CKx continues to deny that it has engaged in any wrongful acts.
The proposed settlement is subject to court approval.