Chairman and CEO of EDM conglomerate SFX Entertainment Robert Sillerman has announced a proposal brought forth to the board of directors to buy back all outstanding stock of the company and take it private.
The proposal would acquire all common stock at a proposed price of $4.75 each in cash, an approximate 44 percent perfect increase on the closing price of the company's stock at market's closing time Monday, Feb. 23, the day before the proposal was delivered to the board. The closing price was $3.70 Tuesday, Feb. 24.
The company has 90.57 million shares outstanding. At $4.75 each, buying back at 90.57 million shares would cost SFX $430.2 million, according to the Hollywood Reporter.
The company initially sold stock during its IPO at a price of $13 a share, according to its Nasdaq filings.
Under the proposal, those who wish to retain their stock within the firm have the right to do so as investors.
"I have put forward a proposal that offers substantial value and flexibility to all shareholders," said Sillerman. "Given the inherent risks in our business, my offer guarantees a substantial premium to current price. Those shareholders who are interested in remaining as investors in the company alongside me will have the ability to elect to keep all or part of their shares."
In addition to his own proposal, Sillerman has requested that the board appoint a special committee of independent directors to parse through his idea and make their own recommendations. Any proposed transition would not go through without the consent of the special committee and the majority of shareholders.
"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," SFX said in a statement. "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."
SFX Entertainment is the parent company of electronic music-oriented companies like Beatport, ID&T, Totem Onelove, Made Event, Disco Donnie and others. Through its subsidiaries, it hosts events worldwide that include, Tomorowland, Electric Zoo, Stereosonic, Mysteryland, Sensation and many others.
