SFX Entertainment Agrees To Be Taken Private By Chairman In $774 Mln Deal

(RTTNews) - SFX Entertainment Inc. (SFXE) announced that it has signed a definitive merger agreement whereby an affiliate of Robert F.X. Sillerman, the Company's Chairman and Chief Executive Officer, will acquire all the outstanding common stock of SFX that he does not already own. SFX stockholders will receive $5.25 in cash for each share of SFX common stock they hold, in a transaction valued at about $774 million.

Stockholders will also be able to elect to retain stock in the Company in lieu of cash, subject to certain conditions and limitations.

The price represents a premium of 42 percent over SFX's closing share price of $3.70 on February 24, 2015, the last trading day before announcement of the going-private transaction.

Sillerman owns approximately 37.4 percent of the outstanding common stock of SFX Entertainment.

The SFX Board of Directors, acting on the recommendation of the Special Committee, unanimously approved the merger agreement under which an affiliate of Mr. Sillerman will take the company private, subject to a number of conditions, including receiving the affirmative vote of a majority of the unaffiliated stockholders. Sillerman recused himself from the Board vote regarding the transaction.

The Special Committee was formed after Mr. Sillerman announced a proposal to acquire all of the outstanding shares of SFX that he does not already own, at a price of $4.75 per share.

The merger agreement provides for a "go-shop" period, during which the Special Committee - with the assistance of Moelis & Company LLC - will actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals.

The go-shop period is 45 days. A successful competing bidder whose qualifying proposal is accepted during the go-shop period would bear a $7.8 million termination fee. For a competing bidder whose proposal is accepted after the initial go-shop period, the termination fee would be $15.5 million.

Sillerman has also agreed to vote his shares in favor of any Superior Proposal that has a value of at least 2.5% more than Sillerman's highest offer.

The transaction is subject to other customary conditions, including receipt of required regulatory approvals, in addition to the SFX stockholder approvals. The transaction is expected to close before the end of 2015.