CKX to Go Private in $1.3B Deal as Firm Pursues Las Vegas Developments

June 01, 2007 By Gail Kalinoski, Contributing Editor

Robert Sillerman, chairman & CEO of CKX Inc., is leading a management buyout valued at $1.3 billion that will take CKX private and distribute shares in FX Luxury Realty L.L.C., an affiliate company pursuing real estate and location-based attractions associated with Elvis Presley and Muhammad Ali in Las Vegas.

CKX owns Graceland and the commercial rights to the names and likenesses of the late singing legend and the boxing great. The firm also owns the American Idol franchise created by CKX director Simon Fuller, who is participating in the complex series of transactions announced today.

“We have come to realize there is a substantial opportunity to capitalize on the Elvis Presley and Muhammad Ali assets in real estate and location-based attractions. However, the pursuit of these opportunities would require a significant investment of capital, which could hinder our ability to grow the core area of our business and which is not consistent with the business plan that we have always described to our stockholders,” Sillerman said a press release. “As a result, we thought it best to provide our stockholders a capital realization opportunity as well as the opportunity to participate in a new public company that will develop real estate and location-based projects that exploit CKX’s iconic intellectual content.”

The merger transaction calls for CKX stockholders to receive $13.75 per share and get shares in FX Luxury Realty for each share of CKX stock owned. CKX said today it has acquired 50 percent of FX Luxury Realty for $100 million. CKX also entered into license agreements with FX Luxury Realty granting it rights to pursue Elvis Presley-themed hotels, casinos and lounges and Muhammad Ali-themed hotels and retreat centers.

The deal calls for CKX to be merged with 19X, a private company owned and controlled by Sillerman and Fuller, who is also CEO of 19 Entertainment Limited, a wholly-owned subsidiary of CKX. The acquisition is expected to be financed through a combination of equity and debt financing with Sillerman, Fuller and other senior managers providing much of the equity.

FX Luxury is co-owned by Flag Luxury Properties L.L.C., a real estate development company and another Sillerman affiliate. FX Luxury is part of a control group that owns about 13 percent of Riviera Holdings Corp., a company that owns and operates the Riviera Hotel & Casino in Las Vegas. As reported by CPN on May 16, Riviera Holdings Corp. announced a $34 share merger proposal for the company. In a letter to the Riviera board, the investor group urged theb to allow the group equal participation in the bidding process.

FX Luxury indirectly owns 50 percent of about 18 contiguous acres of land on Las Vegas Boulevard and has entered into a binding agreement to purchase the remaining half of the property for $160 million. The company plans to build a mixed-use development there featuring a hotel and casino as well as retail and residential space.


Las Vegas commercial loans