CKX Inc., the owner of “American Idol,” said there may soon be discussions about founder Robert F.X. Sillerman’s possible plan to take the entertainment company private.
Sillerman, CKX’s largest shareholder, resigned as chairman and chief executive officer last week to explore a takeover, and to let the board evaluate other options. New York-based CKX disclosed March 29 that it was in talks on a possible sale.
“There is a party that we have been in active dialogue on in the past month that triggered the announcement we made a month ago,” CKX Chief Financial Officer Thomas Benson said today on a conference call, without identifying the party.. “Separately and apart from that, Bob has now expressed a stated interest in taking the company private as well.”
This would be Sillerman’s second attempt to go private with CKX, formed five years ago through a combination with Simon Fuller’s 19 Entertainment. The company was close to an agreement in March with JPMorgan Chase & Co.’s private-equity arm to take CKX private, a person familiar with the situation said then.
CKX, which also owns the rights to the names and images of Elvis Presley and Muhammad Ali, fell 22 cents, or 3.8 percent, to $5.54 at 4 p.m. New York time in Nasdaq Stock Market trading, giving the company a market value of $515.6 million.
After U.S. markets closed yesterday, CKX reported a first-quarter loss of $5.03 million, or 5 cents a share, compared with profit of $12.1 million, or 13 cents, a year earlier. The company recorded $4.85 million in costs tied to a rental property at Graceland and wrote down the value of businesses being closed within 19 Entertainment.
The company was formed in March 2005 when Sports Enterprises acquired 19 Entertainment for about $161.3 million. Fuller, the founder of 19 Entertainment, created the “Idol” concept and imported it from the U.K. Fuller left the company this year and is now a consultant for CKX.
CKX owns two-thirds of the “Idols” brand and co-produces the show in the U.S. with Bertelsmann AG’s Fremantle Media, owner of the other third, according to the company’s annual report. CKX’s 19 Entertainment has a global television and production agreement with Fremantle.