NEW YORK (CelebrityAccess MediaWire) — A shareholder has filed a lawsuit against CKX Inc., challenging a takeover bid made for the company by a group of investors led by the "American Idol" creator and former CKX exec Simon Fuller. CKX currently owns the rights to numerous entertainment brands, including "American Idol" as well as the likeness to celebrities such as Elvis Presley and Muhammad Ali.
Late last month, Fuller's group made a $600 million bid to acquire all of CKX's outstanding common stock, equating to approximately $6.45 per share. This valuation, the lawsuit contends, is "grossly unfair, inadequate, and substantially below the fair or inherent value of CKX" and devalues the company in light of its prospects. CKX stock has been trading below $6 dollars since May 3rd and the company has a current market cap. of $498.8 million.
The investor, Richard Nierenberg, is asking the court to order CKX's board to use an auction system for the company and to accept reasonable offers from other interested parties.
"Delaware law requires directors to take all steps reasonably required to maximize the value stockholders will receive," Nierenberg said in his complaint.
This isn't the first time that Nierenberg has been involved in litigation over CKX. In 2008, he filed a similar suit seeking to block an attempt by company founder Robert Sillerman to take the firm private.
CKX representatives did not respond to requests for comment on the litigation by the time of publication. – CelebrityAccess Staff Writers