Monday, 17 August 2015

SFX - Sillerman buyback off - for now

Robert Sillerman has failed to secure enough investment to take SFX Entertainment back into private ownership: Sillerman's plan to take the EDM powerhouse back into private ownership - having only floated it in 2013 - at a prce of $5.25 per share was a substantial premium on the current share price - but less than half what shareholders paid on the float. On Friday, SFX confirmed in a statement that the buy-back  was now off the agenda, and that therefore the special committee of independent directors, previously set up to consider the firm's founder's proposals, would now start exploring other options for the future of the company. That includes the possibility selling some or all of the firm's assets to another party, or, indeed, an alternative buy back plan from Sillerman. Recent shenanginans including a share sale (!) and a delay in payments to labels from subsidiary Beatport made the buy back look an unlikely happening.


In the past three days of trading – Friday (14/08), Monday (17/08) and Tuesday (18/08) – SFX’s share price has fallen by a worrying 41%, from $1.94 to $1.15. That equates to a total company market capitalisation decline of around $80m, down to just $112.3m - from a value  of $640 milllion in August last year - and the market capitalisation in December 2013 on the cusp of a billion dollars, at $927m.

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