Robert FX Sillerman withdraws latest offer to buy back flagging SFX
By Chris Cooke | Published on Thursday 19 November 2015
So, after all that, turns out Robert FX Sillerman doesn’t want to buy back his EDM company SFX. I wish he’d make his mind up. Does he realise how many words I’ve now written about this buy-back business? Think of the journalists, as my granny used to say.
So yes, Sillerman has withdrawn his latest offer to acquire all of the shares in SFX he doesn’t currently control, according to a filing made with the US Securities And Exchange Commission this week. The SFX founder, who floated his latest entertainment venture back in 2013, has been trying to take back control of the business, and take the firm back into private ownership, away from the public glare of being a publicly listed concern, ever since February.
His initial offer for all the shares he doesn’t currently own met with a frosty reception from Wall Street, so he upped his bid to a generous $5.25 a share. But then, partly because of all the insecurity around the buy-back plan, the SFX share price tanked, making that offer not only very generous, but entirely unrealistic. In August, Sillerman confirmed he couldn’t finance the plan, and the SFX board announced it was considering all and any offers for the firm. Sillerman returned with a new $3.25 per share offer.
But, after recovering a little, SFX’s share price subsequently returned to just above the 50 cents point, especially after the EDM festival maker and Beatport owner released its financials for the summer season last week. “At these low prices the time is not right to go forward on [the buy-back] path”, Sillerman said yesterday, in a memo seen by the Wall Street Journal.
The SFX founder, who continues to lead the flagging firm, went on: “We will instead focus all energy on righting the ship and reversing the disappointing results of this year”. He would “revisit things as they develop”, Sillerman added, keeping his options open, but “for now we will rededicate ourselves to providing the best possible experiences for our fans”.
SFX’s share price hit an all-time low of 41 cents as news of Sillerman’s latest announcement started to circulate last night. Speculation has been rife about the firm’s financial position for months now, with the board’s invitation of offers for some or all of the business spun by some as a “fire sale”. Talk of imminent bankruptcy has circulated in recent weeks, and some analysts now reckon that might be the best outcome for firm’s ongoing sale process, because it owns a number of valuable assets that could prosper again if cut free from the parent company’s debts.
SFX itself it yet to comment on the latest developments.