NEW YORK (CelebrityAccess) — SFX Entertainment revealed that it has a proposal from its founder Robert F.X. Sillerman, the company’s Chairman and Chief Executive Officer, to acquire all outstanding shares of the dance music(EDM)-focused concert promoter, turning the company from a publicly traded firm into a private venture.
According to SFX, Sillerman offered to pay $4.75 per share in cash for every share that he does not currently own. According to Sillerman’s proposal, current shareholders will be offered an opportunity to remain as investors in the company following the acquisition. Mr. Sillerman currently owns approximately 39.8% of the outstanding common stock of SFX Entertainment.
Investor pushback against Sillerman's offer has already begun, with shareholders likely to demand a higher price point for the company, and possibly soliciting competing bids from suitors such as AEG and Live Nation.
“We are more than ready, willing and able to play activist in this situation,” Rich Tullo, an analyst with Albert Fried & Co wrote in a Wednesday note to clients. “We are advocating for the investors here and not for the C Suite establishment.”
SFX went public in October, 2013, debuting at $13 a share but a steady stream of expensive acquisitions have weighed on the company's bottom line, with SFX posting $2.7 million in net losses on $143.6 million in revenue in its most recent financial filing.
However, the acquisitions have allowed SFXE to become a major player in the EDM world, with key festivals such as Tomorrowland, Disco Donnie Presents and Rock in Rio, which debuts in the U.S. this year, under its flag. The company has also acquired key ancillary entities in the sector, including Beatport, considered by many to be the preeminent source of electronic music digital downloads. – Staff Writers
