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SFX board backs move back into private ownership

By | Published on Wednesday 27 May 2015


Robert FX Sillerman is one step closer to taking his EDM powerhouse SFX back into private ownership, after the special committee of independent directors appointed to consider his proposals backed the plan, albeit at a higher than originally proposed price point.

Sillerman only floated his latest music business venture in 2013, but announced earlier this year that he now wanted to buy back all the shares he doesn’t currently control – nearly 63% of the company – presumably to take the firm out of the public glare that comes with being a publicly listed concern. There was a mixed reception to the proposal on Wall Street, hence the appointment of the special committee.

Sillerman originally offered $4.75 a share, which was above the going rate at the time; shares in SFX were selling for $4.12 on Friday. But the offer has now been increased to $5.25 a share, and it is that bid that the special committee unanimously agreed to back on Monday, leading to the company’s board also recommending the deal to shareholders yesterday.

In a statement, the company said: “The SFX board of directors, acting on the recommendation of the special committee, unanimously approved the merger agreement under which an affiliate of Mr Sillerman will take the company private, subject to a number of conditions, including receiving the affirmative vote of a majority of the unaffiliated stockholders. Mr Sillerman recused himself from the board vote regarding the transaction”.

Existing shareholders will be given the option to take equity in the newly private SFX instead of cash in exchange for their current shareholdings, subject to certain terms and conditions.

Yesterday’s statement also added that the special committee will now consider other offers for the company before Sillerman’s buy-back is fully green-lighted, noting that: “The merger agreement provides for a ‘go-shop’ period, during which the special committee – with the assistance of Moelis & Company LLC – will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals. The go-shop period is 45 days”.

But, assuming another serious proposal or offer for the bleep-making conglomerate isn’t put forward, Sillerman hopes to have SFX back in his control as a private business by the end of the year.