SFX Entertainment announced on Tuesday, May 26 that it was officially going to be taken private by its Chairman and CEO Robert F.X. Sillerman. The deal would value the dance and electronic music giant at nearly $490 million after Sillerman raised his per share offer. According to a press release, Sillerman will purchase all remaining outstanding stock he did already own, 62.6 percent, at $5.25 per share.
The transaction represents a 27 percent premium over Friday's closing price and a $.50 boost over his initial February offer of $4.75 a share. The transaction will be valued at approximately $774 million, including the assumption of about $256 million in debt. Stock price surged to $5.01 following the news of the privatization according to the Wall Street Journal.
SFX was taken public in October 2013 at $13 a share, but the price fell rather quickly into the single digits. It was never able to recover, despite small surges here and there. In 2014 the company posted a loss of $131 million, in part due to continues acquisitions of other companies.
Following the February proposal, a Special Committee was formed to review Sillerman's proposal, which led to the approval of the deal. It did not come without conditions however, including the implementation of a 45-day "go-shop" period. During this time frame, the company will actively solicit and evaluate competing takeover bids. A successful bidder found during the 45-day period would be responsible for a $7.8 million termination fee for Mr. Sillerman's bid and the fee would rise to $15.5 million if it was accepted after the initial go-shop period, says the company.
SFX Entertainment owns many of the most influential electronic music-oriented companies, focusing on live events, worldwide like Totem OneLove, Made Event, ID&T, Beatport and Disco Donnie. Though its subsidiaries, SFX hosts events year round like Tomorrowland, Electric Zoo, Mysteryland, Stereosonic, TomorrowWorld, Sensation and more.
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