CKX Holders May Get Bonus
When Company Goes Private
by Ethan Smith
From The Wall Street Journal Online
June 06, 2007
The plan of CKX Inc. Chief Executive Robert F.X. Sillerman and other senior managers to take their company private for $13.75 a share will also provide shareholders with a piece of a new publicly traded real-estate entity that will develop hotels based on celebrity images, the company said Friday.
CKX, which runs Elvis Presley's Graceland estate in Memphis, buys the rights to celebrities' names and likenesses and licenses them to third parties for fees. Its major acquisitions have included rights related to Mr. Presley, Muhammad Ali, soccer star David Beckham and the British company behind the "American Idol" franchise. It is participating in the development of an Elvis-themed Cirque du Soleil show.
The real-estate company, FX Luxury Realty LLC, plans to develop hotels, casinos and other projects based on intellectual property it licenses from CKX. CKX shareholders will get one share of FX Luxury stock for every CKX share they hold. Mr. Sillerman said in an interview he hasn't determined on what exchange FX Luxury would be traded. But its first project is set to start shortly on an 18-acre parcel in Las Vegas, where the company hopes to develop Elvis Presley and Muhammad Ali-themed properties. It also expects to develop hotels around Graceland.
Mr. Sillerman said in an interview that his decision to take CKX private was fostered by a series of glitches in discussions to acquire the image rights associated with several celebrities. He said that a string of people -- whom he declined to name -- had expressed reluctance to having details of their financial and creative lives revealed in public filings with the Securities and Exchange Commission.
Mr. Sillerman added that he expects operating CKX as a private company will smooth its business. "As opposed to in any way being off the trail, this will open it up somewhat," Mr. Sillerman said.
A special committee of CKX's board is to make a recommendation on Mr. Sillerman's proposal after a 45-day period of shopping for other proposals. Word of Mr. Sillerman's proposal sent CKX shares up $4.02, or 38%, to $14.65 in Nasdaq trading Friday.
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