(Reuters) – CKX Inc (CKXE.O), which owns the rights to the American Idol shows, said it received a takeover offer from an investor group led by Simon Fuller, creator of the televised pop contest.
Shares of the company were up as much as 33 percent Friday on Nasdaq, before paring some of the gains to trade up $1 at $5.30. A deal at that price would value the company at about $493 million.
Late on Thursday, The Wall Street Journal reported that Fuller and former Barclays Capital dealmaker Roger Jenkins were planning a $600 million bid for the company, citing people familiar with the matter.
Fuller and Jenkins have amassed a $1 billion fund to make strategic acquisitions, the paper said.
In a statement, CKX said its board is evaluating the proposal as well as other potential strategic alternatives.
CKX has retained Gleacher & Co as financial advisor and Wachtell, Lipton, Rosen & Katz as legal advisor, the company said.
The New York-based company, when contacted, refused to make any further comment on the offer.
CKX has proprietary rights to the Idols television brand, including the American Idol series in the United States and local adaptations of the television show format, according to its website. It also has rights to the names, images and likenesses of Elvis Presley and Muhammad Ali.
The news comes on the heels of CKX’s founder Robert Sillerman’s resignation as chief executive and chairman on May 7.
In March, Sillerman, the company’s largest shareholder with a 21 percent stake, was in the late stages of a buyout transaction led by JP Morgan’s (JPM.N) private-equity branch, One Equity Partners, for $558 million. [ID:nN27208639]
Private equity firms have been striking modest leveraged buyout deals again after a long drought. Financing for deals was severely constrained after the financial crisis.
Craig-Hallum Capital analyst Mark Argento said it is not likely that the company will get another offer. “If somebody did want to buy them they would have probably already approached the company by now.”
CKX shares, which lost 36 percent of their value over the last year, were up 80 cents, at $5.12 in late morning trade on Nasdaq. They touched a high of $5.73 earlier in the session. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Gopakumar Warrier and Saumyadeb Chakrabarty)