News createt: 07-10-2010
New Player In The CKX Battle
Private-equity giant Apollo Management may be smack dab in the middle of the hunt for CKX Inc., the entertainment company behind "American Idol,"
Leon Black's Apollo Management has held meetings with two rival bidders: Allen Shapiro, president and chief executive of Mosaic Media Group, and Robert Sillerman, CKX's founder and former chairman and chief executive officer, according to sources familiar with the talks.
Apollo is mulling the best way to finance a possible deal, either through buying the firm outright or through debt financing, sources said. CKX is valued at around $550 million. In addition to "Idol," CKX owns rights to Elvis Presley and Muhammad Ali.
Apollo, founded by Black 20 years ago, is trying to figure out what creative teams might work best to help bolster's CKX's market position. Apollo's interest comes seven months after CKX first said it was in discussions about a possible sale, although there is little evidence that the process has moved beyond preliminary talks.
Indeed, interest in the firm seems to have waned in recent months.
Sources said JP Morgan Chase's One Equity Partners has backed away from a partnership with Shapiro, who also participated in the buyout of the TV Guide channel toward the end of summer.
Representative for both parties didn't return calls.
Just last week, CKX brought its corporate development executive Kraig Fox in house as chief operating officer -- a sign that the company is looking to beef up its small management team as it wrestles with multiple business lines.
Moreover, New York-based CKX has yet to renew its contract with the Fox TV network for a 10th season of "American Idol," which kicks off in January. Fox, like The Post, is owned by News Corp.
CKX stock closed at $4.97 yesterday, down from its 52-week high of $7.40 last October.
Sillerman said last month he was preparing to make a cash offer for $5.50 a share to $5.75 a share for a controlling stake in the company. He stepped down in the spring to pursue such a takeover attempt.
The Bronx-born businessman still owns about a 21 percent stake in CKX.
The emergence of Apollo is the first sign of new interest in CKX in months. CKX first confirmed it was involved in sale discussions in March.
Apollo is now listening to pitches on whether to jump into the fray, although some fear talks have dragged on so long that CKX may decide to simply take itself off the block.
In May, CKX was the target of at least three potential buyers, including Shapiro and Sillerman, as well as Simon Fuller, one of the creative brains behind "Idol" and his partner Roger Jenkins, a former Barclays Capital executive.