Pair making private play for CKX
Chairman, 'Idol's' Fuller await board vote on bidChairman and CEO Robert "F.X." Sillerman and "American Idol" creator Simon Fuller have made a $13.75-per-share bid for CKX Inc. to take the company private in a cash deal on which the board is expected to vote this morning, Sillerman said Thursday.
The price tag offered represents a 29.4% premium over Thursday's closing price of CKX shares.
CKX holds stakes in such cultural icons as Elvis Presley, Muhammad Ali and soccer star David Beckham and also owns 19 Entertainment, the company behind "Idol." Fuller is CEO of the 19 Entertainment unit.
Sillerman is CKX's largest shareholder, with about 35% as of last count, and the going-private negotiations are in the last stages, according to a source.
Before news of the talks, CKX shares closed up 0.4% at $10.63. That put its market capitalization at $1.03 billion, according to Yahoo Finance. The stock has traded from $8.77-$14.48 during the past year.
Sillerman said the bid has support "from certain other members of management." The company's board has been considering a transaction and will have another meeting this morning.
CKX expects a special committee of independent directors of the board to present a recommendation on the buyout offer at a meeting, the company said.
Observers said Thursday that the language suggests Sillerman is optimistic that the deal will be approved.
Asked this year about the going-private trend in the media and entertainment sector, Sillerman said in an interview that he sees an advantage in CKX's stock market listing, particularly because the stock can be used as an acquisition currency (HR 1/26).
"In our case, we think the opposite," he said at the time about a possible move to the private sector. "With some of the things we have done and some of the things we're about to do, there is actually a value in having a public currency. So, for the time being, we think that there is value. It does give us access to capital."
In the same interview, Sillerman said he expected that Wall Street analysts would start covering CKX this year as management had not encouraged such coverage in the past.
The going-private discussions were first reported by the Wall Street Journal after the market close.
Mirroring the pop culture icons in which the firm has a stake, CKX's board also is full of big names. Aside from Sillerman and Fuller, it includes actress Priscilla Presley; radio personality Bruce "Cousin Brucie" Morrow, who partnered with Sillerman in acquiring two radio stations in upstate New York in the late 1970s; former Warner Bros. executive Edward Bleier; and Jack Langer, the former managing director and global co-head of the media group at Lehman Bros.
Sillerman wasn't available for comment Thursday. The industry legend, who grew up in the Bronx, was chairman and CEO of former radio station group SFX Broadcasting in the '90s. After its sale, he built up live entertainment firm SFX Entertainment, which he sold to Clear Channel Communications in 2000 for $4.4 billion.
CKX has changed a lot over the years. Called Sports Entertainment Enterprises Inc. in the late '80s, it operated a franchise retail golf equipment business and golf training facility, which it later sold.
In February 2005, an investor group led by Sillerman acquired control of the firm and at the same time bought 85% of the entity that controls the name and likeness of Elvis Presley and related assets.
The firm then changed its name to CKX. The "C" and "K" stand for "Content is King." The "X" stands for the "F.X." in Sillerman's name; the CEO won't say what that stands for.
Based here, the company's assets also include talent agency Morra, Brezner, Steinberg & Tenenbaum Entertainment.