Electronic dance music festival company SFX Entertainment has put itself up for sale after a deal to go private fell apart this week.
Founder and Chief Executive Robert F.X. Sillerman in late May offered $5.25 a share to buy the remaining SFX stock he does not already own.
The shares have plummeted in value since then and the company’s “go-shop” period to seek a better deal yielded no formal competing offers.
So what’s next for the New York rave promoter with the colorful CEO?
Sillerman was supposed to file paperwork on Thursday detailing the financing for his bid. However that deadline passed with no news, leading at least one analyst to believe Sillerman now sees an opportunity to lower his offer.
“Given the material discount to the bid, there is clearly an ability for Mr. Sillerman to rationally argue for a lower bid to be accepted,” Stifel analyst Benjamin Mogil said in a note to clients.
The company said Friday it is now exploring “strategic alternatives,” including the sale of the firm as a whole or in parts. SFX said it will consider offers through Oct. 2.
The disclosure comes after a difficult week for SFX, which holds a portfolio of raver-friendly festivals including Electric Zoo, Mysteryland and Tomorrowland. Its share price has fallen by more than 50% in the last five days, including a 28% drop on Friday to $1.39.
On Monday, the company reported a second-quarter loss of $48 million on sales of $121 million.
SFX said Friday it has received an indication of interest from another possible bidder at a price lower than Sillerman’s offer, but did not disclose specifics. It also said Sillerman remains interested in taking the company private either by himself or with partners.
“The October 2 date was chosen to allow potential bidders and their financing sources to have visibility into the Company’s performance during its peak festival season, thus providing a full and accurate picture of the Company’s results and prospects,” the company said in a statement.
Sillerman founded SFX in 2012 to capitalize on the burgeoning market for electronic dance music and live events. SFX went public in October 2013, at $13 a share, but its stock has suffered as it reported big losses.
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