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.
UPDATE
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.
http://www.musicbusinessworldwide.com/sfx-has-lost-half-a-billion-dollars-in-value-over-past-12-months/
http://seekingalpha.com/article/3448436-sfx-entertainment-the-house-of-cards-is-collapsing
The Board SFX Entertainment has told its founder and CEO Robert Sillerman that he has two weeks to confirm his financing for the proposed bid to take the firm back into private ownership. Sillerman wants to buy back all the shares he no longer controls at $5.25 per share in cash. There are no other offers for the EDM group. Payments to labels from the company's Beatport download platfform are seemingly delayed because the "going private process" has "trapped certain earned label payments".
A lawsuit against Sillerman and the SFX's strategy man Sheldon Finkel, filed by three men who claim to be co-founders of the company, has been allowed to move forward after a judge in California refused Seillerman's request for a summary judgement in his favour. Paolo Moreno, Lawrence Vavra and Gabriel Moreno claim that Sillerman approached them in early 2012 to discuss his plans for a dance music-focussed company and used the three men's expertise to identify and purchase seven of the firm's early acquisitions but that they were defrauded out of shares which would now be worth $100 milllion.
