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Robert FX Sillerman still bidding to buy back SFX

By Chris Cooke | Published on Monday 12 October 2015

SFX founder and boss man Robert FX Sillerman has confirmed that he is still bidding to take back complete ownership of his flagging EDM festival promoter and Beatport operator.

As much previously reported, Sillerman’s previous attempt to take the publicly listed music firm back into private ownership stalled in August when he failed to finance the generous offer he had made to the company’s other shareholders. The firm’s board then said it would consider all and any offers for the company or its constituent parts, initially setting 2 Oct as a deadline for bids, before extending that deadline until this Wednesday.

Although Sillerman indicated he would now put together an alternative buy-back plan in August, there was no word of those plans when the bidding deadline was extended, with SFX’s independent directors simply saying that the company’s founder had committed to support their decision regarding the future of the business.

In a new interview with the New York Business Journal, Sillerman says: “I’m bidding for the company, but I’m not opposed to competing bidders”. As for how many competing bidders there might be, he added: “Based on observation, and the amount of due diligence requests that are being processed, there are several”. Word has it that some other major players in live music may be bidding for some of the high profile EDM festival brands in the SFX portfolio.

It’s no secret that 2015 has been a tricky year for SFX, with some investors plotting legal action over Sillerman’s abandoned buy-back plan, and the current call for bids being positioned as a last-ditch “fire-sale” in recent weeks.

In the Business Journal interview, the firm’s founder concedes that with hindsight he possibly expanded his all-new EDM-focused SFX business too quickly, and that synergies between the festivals he acquired, especially when it came to global sponsorship deals, didn’t come as quickly as he had expected.

However, he says that SFX’s recent issues have nothing to do with any waning popularity within the genre in which the firm specialises, because EDM is “bigger than it has ever been”, rather “the reality is, we are behind where we built the company to be; and I think it’s obvious that the market has lost patience”. Which is why, he concludes, the best outcome would be for him to resume complete ownership of the company.

As for SFX’s most recent bad press, the wash-out TomorrowWorld festival near Atlanta, where day-tickets for the final day of the proceedings were cancelled and Saturday attendees had problems exiting the water-logged site, Sillerman says that the event’s insurance policy means the company won’t be hit financially, but he regrets the inconvenience caused to festival-goers.

Logistical problems were heightened, he said, by the Pope being in the US at the time. This made it harder to secure emergency transportation, apparently. What with the rain that caused the problems in the first place, God really had it in for SFX that weekend.

Though in amongst all the speculation around the future of Sillerman’s most recent business venture, the Wall Street gods might now be smiling on the firm a little more than they have in recent months. Its share price went up nearly 11% on Friday after one analyst said stock in the company was way undervalued given the festivals it owns, when compared with other publicly listed festival owners like Live Nation.

At 94 cents, SFX shares are still considerably down on where they started this year, and Sillerman offered $5.25 a share in his original buy-back plan, but still, maybe that’s glimmer of hope to justify the SFX founder’s continued belief in his company.