SFX Entertainment chairman Robert Sillerman has officially followed through on his February proposition to take the company private after its initial 2013 IPO, acquiring the rest of the company’s shares for $5.25 per share in cash, totaling about $774 million. Current stockholders can elect to retain stock in SFX under some undisclosed conditions.
SFX going private isn’t necessarily a sign that the company is in danger of going out of business. In many cases, companies take their shares private in order to reduce the reporting of facts, figures, acquisitions, and business decisions federally required for companies that publicly offer their stock for sale.
At present, SFX owns Beatport, is linked into long-term deals marketing and content deals with the likes of T-Mobile, Yahoo, and Mastercard, and have made a significant dent in the festival ownership marketplace, too.
For numerous reasons, making all that information public is likely not in the best interests of SFX at-present. As a company, SFX’ massive gains and losses could reflect less than an investor-friendly volatility that’s actually part of a larger and well-defined business plan. Also, quite simply, giving potential competitors free rein to look through their books probably isn’t in their best interests, either.
Sillerman already owns 37.4 percent of SFX, and the price he’s paying for the stocks represents a 42 percent premium over the $4.75 per share Sillerman offered when he initially announced plans for SFX’ privatization in February.
Read the complete announcement here.