CORRECTED - UPDATE 2-Apollo to pay $510 mln for American Idol owner CKX

Tue May 10, 2011 12:12pm EDT

(Corrects third paragraph to show CKX shares up 22 percent, not Apollo's shares)

* To pay $5.50 a share in cash

* Two of CKX's largest shareholders back deal

* Stock surges 22 pct in early trading

NEW YORK, May 10 (Reuters) - U.S. private equity firm Apollo Management has struck a deal to buy CKX Inc CKXE.O, which owns pop talent TV show "American Idol," for about $510 million.

The companies said Apollo will pay $5.50 per share in cash for each CKX share -- a 24 percent premium to CKX's closing price on Monday.

CKX shares surged 22 percent to $5.46 in early Nasdaq trading.

CKX, which manages entertainment content including the rights to the names and images of Elvis Presley and Muhammad Ali, said last year that it was in talks to sell itself. It had previously received bids from former CKX Chief Executive Robert Sillerman and an investor group led by "Idol" creator Simon Fuller.

Apollo said two of the company's largest shareholders -- Sillerman and Lisa Marie Presley's Promenade Trust -- have agreed to back the deal.

Gleacher & Co advised CKX on the deal. Apollo said its advisers were AGM Partners, Goldman Sachs & Co and Evolution Media Capital.

Goldman Sachs also provided a debt financing commitment for the deal. (Reporting by Michael Erman in New York and Himank Sharma in Bangalore; Editing by Vyas Mohan and Maureen Bavdek)

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Comments (1)
Mofongo wrote:
I obviously have no idea what data the valuation was based on but I hope it didn’t rely too heavily on American Idol in perpetuity. That show has been around a while and hit it’s peak with audiences. The founding “personalities” have moved on and like the reality show genre its format is getting a bit stale. It was no doubt a good time for the seller to grab value and exit. Hope Apollo knows more about the entertainment industry than Cerberus knew about the car business.

May 10, 2011 11:00am EDT  --  Report as abuse
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