Buyout shop Apollo Global Management will acquire publicly traded CKx Inc., a company that owns the rights to the name, image and likeness of Elvis Presley; the “American Idol” television series; and other entertainment properties. The deal is valued at about $510 million. Apollo will pay CKx shareholder $5.50 per share, a 40% premium over the company’s average closing price over the past six months. Goldman Sachs is providing debt financing for the deal. UPDATE: Gleacher & Co. advised CKx. AGM Partners, Goldman Sachs and Evolution Media provided financial advice to Apollo. Michael Woronoff and Jon Benloulou, of Proskauer, provided legal advice to Promenade Trust. Paul, Weiss, Rifkind, Wharton & Garrison and O’Melveny & Myers were the attorneys for Apollo.
CKx, Inc. (NASDAQ: CKXE), an owner of premium entertainment content, today announced that it has entered into a definitive merger agreement to be acquired by an affiliate of Apollo Global Management (“Apollo”), a leading global alternative asset manager.
Under the terms of the agreement, CKx stockholders will receive $5.50 in cash for each share that they hold, representing an approximately 40% premium over CKx’s average closing price over the past six months and an approximately 25% premium over the closing price on Monday, May 9, 2011. Goldman Sachs Bank USA provided a debt financing commitment in connection with the transaction, which is subject to customary conditions.
The Board of Directors of CKx has approved the merger agreement and has resolved to recommend that CKx stockholders approve the merger. In connection with the definitive merger agreement reached with the Company, Apollo has also obtained support agreements from two significant stockholders, The Promenade Trust, the sole beneficiary of which is Lisa Marie Presley and which is the Company’s partner in Elvis Presley Enterprises, and Robert F.X. Sillerman, the Company’s largest stockholder.
Michael G. Ferrel, Chairman and Chief Executive Officer of CKx, said: “We look forward to working with Apollo, a growth-oriented investor who has a successful history of investing in the media and entertainment sector and one that the Board and management team are confident will serve as a strong steward for the Company’s brands going forward. The transaction allows CKx stockholders to realize significant value from their investment in the Company and the Board has determined that the transaction is advisable, fair and in the best interest of the Company’s public stockholders.”
Aaron J. Stone, a senior partner of Apollo said: “CKx owns a portfolio of irreplaceable assets that present a strong foundation on which to build an exciting future. We look forward to working with Mike Ferrel and the rest of the CKx management team.”
The acquisition of CKx will be completed through a cash tender offer for shares of common stock that is expected to commence shortly and will expire 20 business days after it commences, subject to extension as permitted or required by the merger agreement. The tender offer will be subject to customary conditions, including (i) that the number of shares validly tendered and not withdrawn, together with the shares subject to the stockholder support agreements, represent at least a majority of the outstanding shares of CKx on a fully-diluted basis upon consummation of the tender offer and (ii) the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The merger agreement does not include a financing condition.
The tender offer would be followed by a merger in which each share of common stock not acquired in the offer will be converted into the right to receive $5.50. In certain circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of stockholder approval. Upon completion of the transaction, CKx will become a private company, controlled by an affiliate of Apollo Global Management.
Gleacher & Company and Wachtell, Lipton, Rosen & Katz are serving as financial and legal advisor to the Company, respectively. AGM Partners LLC acted as lead financial advisor to Apollo. Other financial advisors to Apollo include Goldman Sachs & Co. and Evolution Media Capital. Legal advisers to Apollo include Paul, Weiss, Rifkind, Wharton & Garrison LLP and O’Melveny & Myers LLP.
About CKx, Inc.
CKx, Inc. is engaged in the ownership, development and commercial utilization of globally recognized entertainment content. The Company’s current properties include the rights to the name, image and likeness of Elvis Presley and Muhammad Ali, the operations of Graceland, and proprietary rights to the IDOLS and So You Think You Can Dance television brands, including the American Idol series in the United States and local adaptations of the IDOLS and So You Think You Can Dance television show formats which, collectively, air in more than 100 countries. For more information about CKx, Inc., visit its corporate website at www.ckx.com.
About Apollo Global Management, LLC
Apollo is a leading global alternative asset manager with offices in New York, Los Angeles, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of $68 billion as of December 31, 2010, in private equity, credit-oriented capital markets and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.