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Robert FX Sillerman submits new proposal to buy back SFX

By | Published on Monday 19 October 2015


As expected, the boss of EDM powerhouse SFX has submitted a new proposal to buy back all of the shares in the company he doesn’t currently control and take the business back into private ownership.

Robert FX Sillerman first sought to do just that earlier this year, of course, ultimately offering $5.25 a share. But, as investors became uneasy about the music company – both as a result of its financial performance and Sillerman’s plan – the SFX share price tanked, making that bid totally unrealistic, especially as the founder needed to secure financial backing from third parties to go through with the offer.

After that bid was abandoned in August, the SFX board opened the door to all and any new proposals for the firm and its assets, with the deadline for bids passing last week. Sillerman’s new proposal is to buy out all other shareholders at $3.25 a share, a considerable drop on the original deal, but then again SFX shares have slipped well below a dollar in recent weeks (though the share price is now rising again).

There are some complications to the offer, in that shareholders would get some of the money in cash now, and a top-up payment on any future sale of the business. Some shareholders will also be invited to roll over their current equity into the private company Sillerman hopes to create, rather than selling out at this point.

While the proposal is subject to the approval of SFX’s special committee of independent directors, and key shareholders, Sillerman says he does not need to raise any new finance to fund this deal.

Meanwhile, in a letter filed with the US Securities And Exchange Commission, the SFX boss writes: “I am prepared to move expeditiously towards the negotiation and execution of definitive agreements for my proposed acquisition transaction. No further diligence review or analysis is required”.

We now await word from SFX itself on what the aforementioned special committee plans to do next.