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`American Idol' owner CKX agrees to CEO-led buyout

June 02, 2007|From Reuters

CKX Inc., the owner of rights to the Elvis Presley and Muhammad Ali names and the "American Idol" television show, said it would be taken private in a $1.33-billion buyout led by its chief executive.

Shares of the New York-based company soared as much as 44% following the announcement.

Shareholders will receive $13.75 in cash and one share of FX Luxury Realty for each share of CKX, the company said. FX Luxury, an affiliate of CEO Robert F.X. Sillerman's CKX, has real estate interests in Las Vegas as well as licenses to use Elvis Presley's and Muhammad Ali's names in the development of real estate and attractions.

The cash portion of the offer represents a 29% premium to CKX's closing share price of $10.63 on Thursday. On Friday, shares soared to $15.34 before settling at $14.65.

The management group involved in the deal includes "Idol" creator Simon Fuller, the company said.

The deal will be accomplished through a merger with 19X Inc., a private company owned by Sillerman and Fuller, and will be funded through a combination of equity and debt financing.

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