‘American Idol’ owner CKX adopts poision pill
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There is yet another twist to the potential sale of CKX Inc., parent of ‘American Idol’ producer 19 Entertainment.
On Wednesday, CKX said it had adopted a ‘poison pill’ aimed at preventing any potential suitors from trying to team up with Robert F.X. Sillerman, the former chairman and chief executive who resigned earlier this year and indicated he might try to buy the company.
Sillerman owns just over 20% of CKX’s stock, and on Tuesday the company received a letter from a third party saying it was in talks with Sillerman.
The as-yet unnamed suitor apparently would like to team up with Sillerman so it would not have to buy all of the CKX shares to take control of the company. CKX said Sillerman is ‘not expected to tender his shares into any such offer.’
That said, CKX is going ahead with its protection plan. In a statement, CKX said its board has determined that it isn’t in the stockholders’ interest to engage in any deal for less than all of the shares of the company. The CKX Stockholder Rights Plan would allow the company to issue preferred shares to protect from ‘potentially coercive takeover tactics.’
Besides Sillerman, there are two other groups that have expressed interest in buying CKX. One offer is from ‘American Idol’ creator and former CKX board member Simon Fuller, and the other is from One Equity Partners, a private-equity arm of JP Morgan Chase. Hollywood entertainment executive Allen Shapiro is involved in that effort. The JP Morgan Chase offer was about $550 million; Fuller’s offer is for $600 million.
Fuller and Sillerman have had a rocky relationship as of late. When Sillerman ran CKX, he bought Fuller’s 19 Entertainment. The two tried unsuccessfully to take CKX private a few years ago, and this year Fuller resigned after clashing with Sillerman. However, the alliances and friendships in this little corporate drama seems to change daily, so it is not completely out of the realm of possibility that Fuller would try to cozy up with Sillerman again or that JP Morgan Chase would want to woo the former CKX chief to its side.
Besides 19 Entertainment, which also produces Fox’s ‘So You Think You Can Dance,’ CKX owns a management business and a majority stake in Elvis Presley’s Graceland mansion as well as an 80% interest in licensing rights to the name and image of Muhammad Ali.
-- Joe Flint
