SFX Entertainment may not be a public commodity too much longer if Robert F.X .Sillerman has his way. According to The Hollywood Reporter, the CEO of the electronic music giant has proposed a plan by which he might buy back all the shares of the outfit's stock currently owned by outside sources.
SFX went public during October of 2013, starting with a $13 initial public offering. It didn't take too long for shares to fall below $10, and now-a little more than a year later-the stock closed at $3.70 earlier this week. Sillerman's plan involves himself paying $4.75 for every share on the market, a 44 percent premium on actual value (although the stock had risen to $4.40 as of publication). There are an estimated 90.57 million shares outside of the CEO's grasp right now, which would equate to him spending $430.2 million if he were to purchase them all back.
Sillerman has stated that'd he'd be open to "explore alternative transactions" if the company's board suggested otherwise.
"Mr. Sillerman recognizes the board's fiduciary duties in the context of his proposal and understands that the board or the special committee may decide to explore alternative transactions involving a sale of the company," read a statement from the company. "Mr. Sillerman has indicated that, if the board or the special committee decides to explore alternative transactions, he would be prepared to assist in those efforts and, as a stockholder, would be prepared to support an alternative sale transaction that provides compelling value to the company's stockholders."
This may be a deal too good to pass up for those hanging on to SFX shares. Sure, it's a huge loss over the IPO but considering the trajectory the stock has been on...it might not get any better. Then again, Sillerman may foresee brighter pastures for SFX. After all, this is the second iteration of the SFX company. The first was sold off during 2001and changed its name to Live Nation.
