All-Equity Deal For SFX

Robert F.X. Sillerman, the chairman and CEO of SFX who is buying up the shares he doesn’t already own in the company, is financing that deal on an all-equity basis. 

“This is not a leveraged buyout,” Sillerman said in a Business Wire release. “I hope to use all-equity financing to fund the proposed going-private transaction. I have no plans to have the company incur additional debt to fund the transaction.”

That’s probably a good thing, since SFX reportedly spent more than half of the funds raised in its IPO on scooping up EDM festivals last year.

The statement didn’t indicate a prospective source for such financing. SFX announced May 26 its offer to stockholders of $5.25 per share of common stock in cash from a Sillerman affiliate in a $775 million deal. Stockholders cried foul from the time Sillerman announced his intentions, believing the offer and the valuation of the company to be low-balled. Yet SFXE stock price spiked more than 22 percent after the announcement and has hovered just below $5 per share since.

However, some shareholders point out that shares were trading at higher than the $5.25 offered as recently as October.