Thursday, 1 October 2015

TomorroWorld US chaos pushes SFX shares even lower

Shares in flagging EDM powerhouse SFX slipped another 12.5%  because of problems at one of the firm's big events  - the third edition of TomorrowWorld - the American spin off of European dance festival Tomorrowland. Described as an "epic disaster of near-riots and looming lawsuits" by Vice site Thump, the problems at TomorrowWorld were caused by inclement weather, athough many festival-goers are blaming the event's promoters for their poor response to the weather after transportation off the boggy site was curtailed, making it hard to exit the festival with fans left stranded at the roadside. On the final day SFX announced that only those already onsite would have access to the final day's festivities, with non-campers offered refunds on their tickets. Announcing that decision, organisers said  "We take the safety of all of our visitors very seriously. The rainfall since Thursday resulted in limited capacity of festival parking fields, drop-off locations, and the shuttle system. Festivalgoers with day tickets, guest list tickets, and anyone not already camping at DreamVille will unfortunately not be able to access today's events".

The firm recently secured an extra $90 million in financing while the board continues to consider options for the company's future but  the New York Business Journal reported that SFX is currently exploring a fire sale of its assets. If SFX's shares remain under $1 for more than 30 days the company risks losing its Nasdaq listing.


MusicWeek reports that SFX has extended the deadline for bids by a further two weeks. The company's special committee of independent directors, with the agreement of chairman and CEO Robert F.X. Sillerman, have now set an initial bid deadline of of October 14, for third-parties to submit proposals to acquire either the entirety of SFX, or assets "not central to the company’s core business". Sillerman has committed to back the decision of the independent directors regarding the future of the business, with the company saying "Pursuant to a voting agreement between Sillerman and his affiliates and the company, Sillerman has agreed to vote all shares beneficially owned by him in favour of a transaction involving the sale of the company that is recommended by the special committee". This agreement lasts until December 2015.

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