After more than a year on the block, “American Idol” co-owner CKX Inc. has found a buyer in private equity giant Apollo Global Management through a deal valued at about $509 million.
In addition to owning “Idol” producer 19 Entertainment, which also produces “So You Think You Can Dance,” CKX controls the naming and image rights to Muhammad Ali and Elvis Presley and it owns the King’s Memphis manse Graceland.
An affiliate of Apollo offered $5.50 per share for CKX, representing a 25% premium to its closing price on Monday, the companies said Tuesday. If the offer wins shareholder approval, CKX will become a private company.
Apollo has gained approval from two of CKX’s biggest shareholders, Robert F.X. Sillerman and the Promenade Trust, the company’s partner in Elvis Presley Enterprises and whose beneficiary is Lisa Marie Presley.
Apollo was anything but explicit about its plans for the company. Aaron J. Stone, a senior partner of Apollo, said: “CKX owns a portfolio of irreplaceable assets that present a strong foundation on which to build an exciting future. We look forward to working with (CEO) Mike Ferrel and the rest of the CKX management team.”
Run by renowned banker Leon Black, Apollo, which manages assets valued at $68 billion, is in the process of taking one of its other main entertainment properties, No. 2 U.S. theater chain AMC Entertainment, public. One investment banker on Tuesday suspected that will be the plan for CKX, in short course. Private-backed IPOs are on a tear, with Nielsen being the latest in media and Univision mulling the same.
The sale of CKX has been full of twists involving big name executives. “Idol” creator Simon Fuller, who sold 19 Entertaimment to CKX six years ago for $200 million, teamed with Barclays bank last May to try to buy CKX for a bid reported to be around $600 million. CKX didn’t bite on the offer but Fuller, who has since started his own company XIX Entertainment, still acts as a consultant to CKX. Another entity that showed interest was One Equity Partners, a private equity unit of J.P. Morgan Chase who teamed with Allen Shapiro, CEO Of Mosaic Media Group.
Sillerman resigned as CEO last May but remained a shareholder with a 20% stake. He founded CKX in 2005 and took it public, this after selling his concert and promotions business SFX Entertainment to Clear Channel five years earlier for $4.4 billion. After his own plans last year to take CKX private didn’t pan out, Sillerman left his CEO spot and was replaced by Ferrel.
On Tuesday, Ferrel said: “We look forward to working with Apollo, a growth-oriented investor who has a successful history of investing in the media and entertainment sector and one that the Board and management team are confident will serve as a strong steward for the Company’s brands going forward. The transaction allows CKx stockholders to realize significant value from their investment in the Company and the Board has determined that the transaction is advisable, fair and in the best interest of the Company’s public stockholders.”
Following the announcement, CKX shares traded up about a dollar to $5.46.