[UPDATED] SFXE stock closed Friday up 12.5% at $1.17 per share after founder and CEO Robert Sillerman offered to acquire all of the outstanding shares of Common Stock not already owned by him for up to $3.25 per share.
The news that founder and CEO Robert Sillerman was offering to buy the company for up to $3.25 per share pushed SFXE stock, which had been trading well under $1 for weeks, up as high at $1.48 per share Friday morning. By the end of trading Friday, shares settled back to $1.17 per share
Under the proposed agreement, stockholders would receive $2.25 in cash per share now, plus another $1.00 a share after the company is sold. If the EDM conglomerate isn’t sold within 5 years, stockholders would get 10% of the appraised equity value of the company. [Full statement below]
New Potential Lawsuit
Also on Friday morning, the law firm of Cohen Milstein Sellers & Toll PLLC announced that they were conducting an investigation to determine whether SFX Entertainment and "certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934."
Another class action lawsuit has also been filed in the U.S. District Court for the Southern District of New York by another firm on behalf of purchasers of SFXE stock between February 25, 2015 to August 17, 2015.
Full SFXE Statement On The Sillerman Proposal
"On October 14, 2015, Mr. Sillerman delivered a non-binding letter to the Board of Directors of the Company (the "Board") to propose a potential transaction for the Board's consideration. Under the proposed transaction, Mr. Sillerman would be prepared to acquire, through one or more acquisition vehicles, all of the outstanding shares of Common Stock not already beneficially owned by him for up to $3.25 per share in cash; at the same time, stockholders of the Company who wished to retain their equity interest in the Company would have the option to do so, subject to a maximum of 75 shareholders, and roll over their shares into equity interests of the acquiror alongside Mr. Sillerman ("Proposed Transaction").
Under the Proposed Transaction, each stockholder of the Company (other than those who elect to roll over their shares) would receive at closing (i) an amount per share in cash equal to the sum of $1.75 plus 100% of the amount Mr. Sillerman receives, up to $50MM in the aggregate applied pro rata to all shareholders, for the credit and other support he has provided to the Company, and (ii) a non-tradeable contingent payment right entitling the holder to receive up to an additional $1.00 per share in cash upon future sale of the Company."