CKX, the parent company of "American Idol" producer 19 Entertainment, which struck a deal Tuesday to be acquired by private equity firm Apollo Global Management for about $509 million, filed its agreement with the Securities and Exchange Commission.
The deal has already been blessed by the CKX board of directors and company founder and former Chairman Robert Sillerman, who remains the largest individual shareholder with 20.6% of the stock.
However, in the unlikely event that the deal falls apart, things could get costly. Per the regulatory filing, there is a $20-million fee that CKX could have to pay Apollo if it found another buyer. There are also conditions that call for Apollo to pay CKX if the deal does not close.
The purchase price of $5.50 a share was seen as low by one analyst who follows the company.
"We think $5.50 per share is pretty cheap," said Mark Argento, an analyst with Craig-Hallum Capital Group.
Over the last few years there were other suitors for CKX, including Sillerman, "American Idol" creator Simon Fuller and most recently Alec Gores, who heads The Gores Group private equity firm.
However, with the backing of the board, Sillerman and other shareholders, a competing bid seems unlikely.
"The probability of someone else coming over the top is fairly remote," Argento said.
-- Joe Flint