SFX says chairman is still interested in taking company private, but at a lower price
SFX Entertainment said Friday that a deal to sell the music-festival promoter to its chairman and CEO is off, although it said Robert Sillerman is still interested in buying the company at a lower price.
The company said Friday that it has received one "indication of interest." But that indication was for less than $5.25 per share, the amount Sillerman offered and SFX accepted in late May.
Sillerman, who is also SFX's largest shareholder, had agreed to take the company private in a deal that valued it at around $490 million. Since then the stock has plunged, closing at $1.94 on Thursday. The shares fell to $1.54 in Friday afternoon trading.
Several weeks after the deal to sell the company to Sillerman was announced, SFX announced a separate agreement to sell $15 million in stock to Sillerman and two investment funds. Sillerman agreed to buy $5 million in stock for $4.82 per share, well below the buyout price, while the investment funds paid an even lower price of $4.34 per share. SFX and Sillerman said the terms of the deal to take the company private would not change, but the stock continued to trade lower.
The agreement between SFX and Sillerman allowed the company to seek out other offers, but in July it said it had not received any formal competing bids. The company said there was interest in various parts of its business, however.
Now, a special board committee of SFX's independent directors will entertain offers for the company and for non-central assets through at least Oct. 2, the company said Friday. SFX said Sillerman authorized that move. The company said it chose that date so potential acquirers can see how it performs during peak festival season. SFX's events include the Electric Zoo, TomorrowWorld, and Rock in Rio.
Sillerman initially offered to take the company private for $4.75 per share in February, a premium of more than 40 percent at the time.
FactSet says Sillerman currently owns 31.8 percent of SFX's stock.
SFX went public in October 2013 with an IPO that priced at $13 per share. It reached a low of $1.38 per share on Friday.