Robert Sillerman's SFX Entertainment Privatization Plan Fails
In the past few weeks, things have started to look bleak for Robert F.X. Sillerman in his big to try and take dance music conglomerate SFX Entertainment private. He had been struggling to find the financing from investors to begin an aggressive share buyback plan at the agreed price in May of $5.25 per share. Now that the company's shares are valued at $1.39 (at market closing time on Friday, Aug. 14), the initial offer of $5.25 has become untenable and SFX is now exploring other options as it looks like this plan has failed (at least for the moment).
With the share price continuing to tumble amid news of low investment and poor quarterly earnings, the company is now exploring "strategic options" for its future. Going private is still a possibility if Sillerman can arrange a new, lower price to buy back the shares and get the capital to do so.
However, the company is renewing its search for potential buyers for either the full company or only parts of it. The special committee originally set up to entertain "go shop" offers and help oversee the privatization will review offers from now until Oct. 2, 2015. All go-shop restrictions have been lifted until Oct. 2 to help facilitate offers.
Sillerman first proposed taking the company private for $4.75 per share, which was revised after a special committee reviewed his offer of $5.25 in May. He has struggled to find the financing to complete the privatization effort and did not find any suitors to buy the company.
Among the companies under the SFX umbrella include ID&T, which hosts festivals like Tomorrowland, TomorrowWorld, Sensation and Mysteryland, Beatport, Made Event, which hosts Electric Zoo, Disco Donnie Presents and Life In Color. Even if the firm can't find an adequate offer to try and buy the complete business, there are attractive, profitable companies that could be spun off or sold.