CKX Inc., the owner of “American Idol,” confirmed that it received an acquisition proposal today from an investor group led by Simon Fuller, the founder of 19 Entertainment and creator of the “Idol” TV series.
Fuller and former Barclays Plc executive Roger Jenkins submitted a $600 million bid for CKX, said a person familiar with the situation, who declined to be identified because the matter is private. CKX is evaluating the proposal and other potential alternatives, according to its statement today.
Fuller, 50, left CKX in January and has continued to offer creative services in exchange for $5 million a year and 10 percent of the profit from TV shows “Idol,” “So You Think You Can Dance” and “If I Can Dream.” Fuller and former CKX Chief Executive Officer Robert F.X. Sillerman, 62, tried to take CKX private in 2007, dropping the $12-a-share bid in 2008.
CKX rose 98 cents, or 23 percent, to $5.30 by 4 p.m. in Nasdaq Stock Market trading, giving the company a market value of about $493 million. The shares jumped the most since March 26. The Wall Street Journal reported the bid yesterday.
The offer is worth about $6.45 a share, based on the company’s approximate 93.1 million shares outstanding.
CKX said there’s no assurance a transaction will take place and doesn’t plan to make additional statements regarding the status of talks unless a definitive agreement is reached. The company hired Gleacher & Co. as its financial adviser and Wachtell, Lipton, Rosen & Katz to provide legal advice, according to the statement.
Ed Tagliaferri, a spokesman for New York-based CKX, declined to comment beyond today’s statement. Julian Henry, a spokesman for Fuller, also declined to comment.
Fuller sold 19 Entertainment to Sillerman five years ago, part of the string of deals that created CKX. Sillerman, CKX’s largest shareholder, resigned as chairman and CEO May 7 to pursue a possible takeover of the company, which also owns the rights to Elvis Presley’s name and image.
Before Sillerman and Fuller lowered their bid in 2008, the offer was worth $13.75 a share, valuing the company at $1.3 billion. Fuller’s offer today is 54 percent lower.
Jenkins, 54, didn’t immediately respond to a message left at Dublin, Ireland-based Elkstone Capital, the corporate finance and advisory firm he created last year and where he is a principal. He had been the head of principal investments and chairman of the Middle Eastern investment banking unit at Barclays and left last year.
In March, 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 at the time.