Apollo snares American Idol owner CKX

NEW YORK (Reuters) - "American Idol" owner CKX Inc will be taken private in a $510 million deal with U.S. private equity firm Apollo Management.

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

CKX shares surged 23 percent to $5.46 in Nasdaq trading.

CKX, which also manages entertainment content including the rights to the names and images of Elvis Presley and Muhammad Ali, said last year 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.

The value of CKX's shares had declined in recent years after topping out at around $28 in 2005.

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

"American Idol" has grown its audience this season after years of slipping ratings. The show brought in singer-actress Jennifer Lopez and Aerosmith frontman Steven Tyler as judges after Simon Cowell left to launch the U.S. version of TV talent show "The X Factor."

Several other rival TV singing shows have been launched, including "The Voice" on NBC.

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, Maureen Bavdek and Gunna Dickson)