The former chief of CKX Inc., the company that owns “American Idol,” is dangling cash in front of shareholders in his bid for control of his old company.
Robert F.X. Sillerman, who left the CEO position in May to launch a takeover attempt, said yesterday that he plans to ask shareholders to sell him their stock for between $5.50 and $5.75 a share to gain a controlling stake. At the high end of the range, the offer values the company at $535 million.
In his proposal, Sillerman, who is also the company’s largest shareholder with a 21 percent stake, said he expects the tender offer to return him to the CEO post. He also warned that he might seek a shakeup of the company’s board of directors, which recently inserted a poison pill in an effort to thwart his takeover efforts.
Sillerman’s bid values CKX below a competing offer from Sillerman’s former partner and “American Idol” creator Simon Fuller — whose offer earlier this year valued CKX at $600 million.
In May, CKX, which also owns rights to the images of Elvis Presley and Muhammad Ali, confirmed it had received a rival offer from Fuller, who teamed up with former Barclays Capital banker Roger Jenkins.
Fuller has since dropped out of the bidding.
Sillerman had been working with JPMorgan Chase’s One Equity, but it’s unclear who’s backing him now. In yesterday’s filing with the Securities and Exchange Commission, Sillerman said he’s “continuing to have discussions” with potential financial backers.
The 62-year-old native New Yorker’s offer will have to take into consideration the company’s poison pill defense. As such, Sillerman said he will follow through with his offer only if 30 percent of the shareholders agree not to tender their shares.
For many, Sillerman has a golden touch in the entertainment sector.
He founded concert promoter SFX Entertainment which, in 2000, he sold to Clear Channel Communications for $4 billion. Five years later, he purchased Fuller’s 19 Entertainment for the bargain price of $160 million. That company, which owned the rights to “American Idol,” became a profit engine for CKX.
Shareholders gave Sillerman’s performance less than stellar reviews. Shares of CKX closed down 2.55 percent, or 14 cents, to $5.36 a share