2 SFX Acquisition Proposals Get Antitrust Scrutiny

In an SEC filing Tuesday, SFX Entertainment Inc. disclosed that it has “received notice of a preliminary inquiry” from the Justice Department Antitrust Division relating to SFX’s proposed acquisitions of the Marquee Group Inc. and the Cellar Door group. SFX announced plans in the last two months to buy Marquee for $100 million and Cellar Door for $105 million.

The stock of New York-based SFX plunged nearly 15% on the news, closing at $26.94, off $3.94, on Nasdaq.

SFX spokesman Timothy Klahs had denied a report in The Times three weeks ago that the acquisition of Cellar Door--a major U.S. concert promoter that is based in Florida--was being scrutinized by the Justice Department. The two companies would add to SFX’s swift consolidation of the live entertainment business through a series of deals valued at roughly $1 billion.

In the filing, SFX officials state that they intend to “cooperate fully” with the inquiry. “The Company believes that the . . . acquisitions, along with the Company’s overall business and plan of acquisitions, are in compliance with applicable trust laws,” the filing states. As part of the inquiry, SFX will resubmit its SEC filing under the Hart-Scott-Rodino Antitrust act for Marquee.

Klahs did not return calls seeking comment. A spokeswoman for company chairman Robert F.X. Sillerman said Sillerman was not available for comment.