Robert Sillerman’s offer to take his EDM conglomerate SFX private has failed. Sillerman’s offer of $5.25 per share for the company became increasingly untenable as the stock continued to decline to its current $1.55 per share — a 20.1 percent decline from Thursday’s closing price. SFX has released a statement on Friday saying it is exploring “strategic alternatives” for its future.
The company writes it will consider offers on the company and its many constituent parts through Oct. 2. The company also says that all no-shop restrictions have been removed in order to facilitate upcoming bids, “in light of the recent substantial decline in its share price.”
A bid of $5.25 seemed increasingly unlikely as SFX’s stock price fell this week. Shares fell nearly 23 percent to $2.36 on Monday ahead of the company’s earnings release at the end of the day. After a small rebound Tuesday, SFX shares fell nearly 11 percent to $2.09 on Wednesday.
The slide continued Friday. With no word from SFX about a deal, shares fell as much as 28.9 percent to $1.38 and were trading down 20.1 percent at $1.55 in the early afternoon.
Perhaps Sillerman didn’t fail as much as wait for a better opportunity. In a Friday note to investors, Stifel analyst Ben Mogul said he believe Sillerman “has materially changed his bid.” He added, “Given the material discount to the bid, there is clearly an ability for Mr. Sillerman to rationally argue for a lower bid to be accepted.”
Sillerman first made a proposal of $4.75 per share in February. He upped the offer to $5.25 — accepted by a special committee in May — after pushback from analysts and investors that believed the company to be worth more. But as time passed the deadlines delayed, there were doubts Sillerman would be able to secure financing even though Sillerman, as a source told Billboard, has “shaken every tree.”
As for another proposal from Sillerman, SFX has not indicated when it might be announced.