Robert Sillerman Submits New Offer to Buy Back SFX

Robert F.X. Sillerman
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Robert F.X. Sillerman rings the NASDAQ closing bell at NASDAQ MarketSite on Oct. 9, 2013 in New York City. 

Robert F. X. Sillerman has submitted a new proposal to his board of directors to take SFX Entertainment private again. Under the transaction, Sillerman, who is chairman and CEO of the company, would buy out remaining stockholders for up to $3.25 per share in cash.

In a letter filed to the SEC, Sillerman outlined how the acquisition would go down: first, stockholders would receive approximately $2.25 in cash per share at closing, plus another $1.00 per share upon future sale of the company as part of a non-tradable contingent payment right (CPR). Silverman notes that if the EDM promoter isn’t sold in five years, stockholders would get 10 percent of the appraised common equity value of the firm.

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In addition, Sillerman said he would welcome up to 75 shareholders the opportunity to roll over their equity into the private company.

"I am prepared to move expeditiously towards the negotiation and execution of definitive agreements for my proposed acquisition transaction," he said in the letter. "No further diligence review or analysis is required."

The proposal is subject to approval by the Special Committee of the Board and other major shareholders.

Shares of SFX Entertainment (NQ: SFXE) opened at $1.04 on Friday.

It’s been a stormy year for SFX, which announced in February that it received a bid by Sillerman to buy all remaining shares. The board of directors solicited competing bids but investors were interested only in parts of the company rather than the entire company. To shore up its finances, SFX was forced to sell equity at favorable terms to two investors and line up $90 million in financing. There were also changes to upper management in both January and July.