SFX Entertainment, Inc. (Nasdaq:SFXE) today announced it has
signed a definitive merger agreement whereby an affiliate of
Robert F.X. Sillerman, the Company’s Chairman and Chief Executive
Officer, will acquire all the outstanding common stock of SFX that
he does not already own. Mr. Sillerman owns approximately 37.4
percent of the outstanding common stock of SFX Entertainment.
Under the terms of the agreement, SFX stockholders will receive
$5.25 in cash for each share of SFX common stock they hold, in a
transaction valued at approximately $774 million. Stockholders will
also be able to elect to retain stock in the Company in lieu of
cash, subject to certain conditions and limitations. The price
represents a premium of 42 percent over SFX’s closing share price
of $3.70 on February 24, 2015, the last trading day before
announcement of the going-private transaction, and a premium of
approximately 49 percent over the volume weighted average closing
share price during the previous 30 trading days ending February 24,
2015. The terms of the transaction were negotiated by a
Special Committee of independent directors.
The SFX Board of Directors, acting on the recommendation of the
Special Committee, unanimously approved the merger agreement under
which an affiliate of Mr. Sillerman will take the company private,
subject to a number of conditions, including receiving the
affirmative vote of a majority of the unaffiliated stockholders.
Mr. Sillerman recused himself from the Board vote regarding the
transaction.
The Special Committee was formed after Mr. Sillerman announced a
proposal to acquire all of the outstanding shares of SFX that he
does not already own, at a price of $4.75 per share. The Special
Committee retained independent financial and legal advisors, Moelis
& Company LLC and Steptoe & Johnson LLP, respectively, to
advise it with respect to its consideration of strategic
alternatives, the acquisition proposal and the subsequent
negotiation of the merger agreement.
The merger agreement provides for a “go-shop” period, during
which the Special Committee – with the assistance of Moelis &
Company LLC – will actively solicit, receive, evaluate and
potentially enter into negotiations with parties that offer
alternative proposals. The go-shop period is 45 days. A successful
competing bidder whose qualifying proposal is accepted during the
go-shop period would bear a $7.8 million (1.5 percent of equity
value) termination fee. For a competing bidder whose proposal is
accepted after the initial go-shop period, the termination fee
would be $15.5 million. Mr. Sillerman has also agreed to vote his
shares in favor of any Superior Proposal (as defined in the merger
agreement) that has a value of at least 2.5% more than Mr.
Sillerman’s highest offer.
The transaction is subject to other customary conditions,
including receipt of required regulatory approvals, in addition to
the SFX stockholder approvals described above. The transaction is
expected to close before the end of 2015.
For further information regarding all terms and conditions
contained in the definitive merger agreement, please see SFX’s
Current Report on Form 8-K, which will be filed in connection with
this transaction.
Moelis & Company LLC is acting as exclusive financial
advisor and Steptoe & Johnson LLP is acting as legal advisor to
the Special Committee of SFX’s Board of Directors. Jefferies &
Company is acting as financial advisor to Mr. Sillerman, and Fried,
Frank Harris, Shriver & Jacobson is acting as legal advisor to
Mr. Sillerman.
Additional Information and Where to Find It
SFX plans to file a proxy statement for the solicitation of
votes of SFX stockholders to approve the merger. THE PROXY
STATEMENT WILL CONTAIN IMPORTANT INFORMATION ABOUT SFX AND THE
TRANSACTION. STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT
CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY DECISION
REGARDING VOTING ON THE TRANSACTION. These documents will be made
available to SFX stockholders at no expense to them and will also
be available for free at the SEC's website at www.sec.gov.
Additional copies may be obtained for free by contacting SFX at 646
561 6400.
SFX and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from SFX’s stockholders
in connection with the proposed transaction. Information regarding
SFX’s directors and executive officers is available in its Annual
Report on Form 10-K, as amended, filed with the SEC. Other
information regarding potential participants in the proxy
solicitation will be contained in SFX’s proxy statement filed in
connection with the transaction.
About SFX Entertainment
SFX Entertainment, Inc. (NASDAQ: SFXE) is the largest global
producer of live events and digital entertainment content focused
exclusively on electronic music culture (EMC) and other world-class
festivals. SFX's mission is to provide electronic music fans with
the best possible live experiences, music discovery, media and
digital connectivity. SFX was borne out of the technology
revolution and produces and promotes a growing portfolio of live
events that includes leading brands such as Tomorrowland,
TomorrowWorld, Mysteryland, Sensation, Stereosonic, Electric Zoo,
Disco Donnie Presents, Life in Color, Rock in Rio, Nature One,
Mayday, Decibel, Q-Dance, Awakenings, and React Presents, as well
as the innovative ticketing services Flavorus and Paylogic.
SFX owns and operates Beatport, the trusted global home of
electronic music where fans, DJs, and creators connect, discover,
and participate in the evolution of dance music culture. Beatport
offers a complete music experience for everyone, everywhere
including streaming music, mobile apps and a host of ways for the
EMC community to enjoy or download files, attend transformational
festivals and events both in person and online, connect with
like-minded fans and inspirational artists, and receive news,
reviews, and unique insider access.
Forward Looking Statements
This release may include predictions, estimates and other
information that might be considered forward-looking statements,
including, without limitation, statements relating to the
completion of this transaction. These statements are based on
current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially from those
anticipated as a result of various factors, including: (1) the
required stockholder approval may not be obtained; (2) conditions
to the closing of the transaction may not be satisfied; (3) the
transaction may involve unexpected costs, liabilities or delays;
(4) the business of SFX may suffer as a result of uncertainty
surrounding the transaction; (5) the outcome of any legal
proceedings related to the transaction; (6) SFX may be adversely
affected by other economic, business, and/or competitive factors;
(7) the occurrence of any event, change or other circumstances that
could give rise to the termination of the transaction agreement;
(8) the risk that Mr. Sillerman may not have sufficient funds to
consummate the transaction; (9) risks that the transaction disrupts
current plans and operations and the potential difficulties in
employee retention as a result of the transaction; and (10) other
risks to consummation of the transaction, including the risk that
the transaction will not be consummated within the expected time
period or at all. Additional factors that may affect the future
results of SFX are set forth in its filings with the SEC, including
its Annual Report on Form 10-K for the year ended December 31,
2014, which is available on the SEC’s website at www.sec.gov.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
thereof. Except as required by applicable law, SFX undertakes no
obligation to update forward-looking statements to reflect events
or circumstances after the date thereof.
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Investor Relations:SFX
Entertainment, Inc.Richard RosensteinChief Financial Officer &
Chief Administrative Officer646-561-6400orJCIRJoseph Jaffoni,
212-835-8500sfxe@jcir.comorMedia:DKC
Public RelationsEd Tagliaferri, 212-981-5182edmund_tagliaferri@dkcnews.com