By Lisa Kerner
Charlotte, N.C., June 1 – CKX, Inc. agreed to sell the company in a deal that gives stockholders $13.75 per share in cash as well as one share of FX Luxury Realty, LLC stock for each share of CKX they hold.
FX Luxury Realty is an affiliate of CKX chairman and chief executive officer Robert F.X. Sillerman. CKX will be merged with 19X, Inc., a private company owned and controlled by Sillerman and Simon R. Fuller, a CKX director and CEO of 19X subsidiary 19 Entertainment Ltd.
Under the agreement, CKX has a 45-day “go-shop” period in which to solicit competing proposals. During the go-shop period, the $37 million termination fee would not be payable to 19X.
CKX stockholders will receive a cash return on their CKX investment and also benefit from CKX’s Elvis Presley and Muhammad Ali assets through FX Luxury Realty’s real estate projects, a company news release stated.
19X will fund the acquisition through a combination of equity and debt financing, with Sillerman, Fuller and other senior management members providing a “substantial portion” of the equity commitment.
“After two successful years of developing and exploiting the assets we have acquired, during which time we have seen tremendous year over year growth, we have come to realize that there is a substantial opportunity to capitalize on the Elvis Presley and Muhammad Ali assets in real estate and location-based attractions,” Sillerman said in the release.
“However, the pursuit of these opportunities would require a significant investment of capital, which could hinder our ability to grow the core area of our business and which is not consistent with the business plan that we have always described to our stockholders. As a result, we thought it best to provide our stockholders a capital realization opportunity as well as the opportunity to participate in a new public company that will develop real estate and location-based projects that exploit CKX’s iconic intellectual property content.”
CKX acquired 50% of FX Luxury Realty on June 1 for $100 million in cash. FX Luxury Realty is co-owned by Flag Luxury Properties LLC, a real estate development company and a Sillerman affiliate. FX Luxury Realty is part of a control group that owns about 13% of Riviera Holdings Corp. and recently offered $34 per share for the Riviera Hotel & Casino in Las Vegas.
New York-based CKX owns and develops entertainment content.
19 Entertainment is based in London and produces entertainment properties, including “American Idol.”
| Acquirer: | FX Luxury Realty, LLC
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| Target: | CKX, Inc.
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| Price per share: | $13.75 per share plus one share of FX Luxury Realty
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| Announcement date: | June 1
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| Termination fee: | $37 million
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| Expected closing: | Upon approvals
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| Stock price for target: | Nasdaq: CKXE: $10.63 on May 31
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