Robbins LLP: Acquisition of SFX Entertainment Inc. (SFXE) by an Affiliate of Chairman and CEO Robert F.X. Sillerman May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of SFX Entertainment Inc. (NASDAQ: SFXE) by an affiliate of the Company’s Chairman and CEO Robert F.X. Sillerman. On May 26, 2015, the two parties announced the signing of a definitive merger agreement pursuant to which Robert Sillerman will acquire SFX. Under the terms of the agreement, SFX shareholders will receive $5.25 in cash for each share of SFX common stock.
Is the Proposed Acquisition Best for SFX and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at SFX is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $5.25 merger consideration is below the target price of $7.50 set by an analyst at Rhino Trading Partners LLC on November 21, 2014, and $7.00 set by an analyst at Jeffries on March 13, 2015. In the last three years, SFX traded as high as $13.39 on October 9, 2013, and most recently traded above the target price – at $5.35 – November 5, 2014.
On May 11, 2015, SFX reported strong quarterly earnings results for its first quarter 2015. Revenue for the quarter was $52.2 million, an increase of 56.6% from the first quarter of 2014. In commenting on these results, SFX Chairman and Chief Executive Officer Robert F.X. Sillerman remarked, “The progress SFX continues to make with our operating initiatives, including the successful re-launch of Beatport as the leading mobile and streaming app for EDM fans around the world, reinforces my belief that value is being created in the business. In addition, the U.S. debut last weekend of Rock in Rio in Las Vegas was a key reminder of the power of our global brands.”
In light of these facts, Robbins LLP is examining SFX’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
SFX shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
SFX shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.