`American Idol' Owner Adopts Poison Pill as Group Considers Tender Offer
Stock Chart for CORE Media Group Inc (CKXE)
CKX’s board received a letter from a third party indicating possible interest in a tender offer for less than all of the company’s shares, CKX said today in a statement, without identifying the investor. The bidder is in discussions with Sillerman, who resigned as chairman and chief executive officer last month to pursue a possible takeover.
The rights plan, or so-called poison pill, would allow CKX to issue preferred shares to investors to prevent “coercive takeover tactics.” The shares sought in the tender offer, in combination with Sillerman’s 21 percent stake, would represent majority ownership, and New York-based CKX said an offer for less than all of the shares wouldn’t be in investors’ interests.
CKX received a $600 million bid last month from an investor group led by Simon Fuller, a person familiar with the offer said at the time. Fuller is the founder of 19 Entertainment and creator of the “Idol” TV series. Another offer came in March when CKX was close to an agreement with One Equity Partners, JPMorgan Chase & Co.’s private-equity arm, to take the company private, a person familiar with the situation said then.
Sillerman and the unnamed group have not yet reached an agreement, and he isn’t expected to tender his shares, CKX said.
CKX declared a dividend of one preferred share purchase right for each outstanding share of common stock. The purchase right would be activated only if triggered by the plan, the company said. The rights aren’t designed to prevent a takeover, and the board said it would consider a fully financed proposal.
Sillerman acknowledged the third party’s tender offer in a regulatory filing after U.S. markets closed yesterday and said he urged the board to pursue the opportunity.
Fuller and Sillerman had tried to take the company private in 2007, dropping the $12-a-share bid in 2008.
CKX, which also owns the rights to Elvis Presley’s name and image, rose 19 cents, or 4 percent, to $4.90 at 4 p.m. New York time in Nasdaq Stock Market trading, giving the company a market value of about $456 million. The shares are trading below Fuller’s $6.45-a-share takeover offer.
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