Entertainment Enterprises, Inc. (OTC Bulletin Board: SPEA) announced
today that it had consummated the previously announced transaction
pursuant to which RFX Acquisition LLC, an entity formed and
controlled by Robert F.X. Sillerman, acquired a controlling
interest in the Company. That transaction was closed simultaneous
with the Company's acquisition of an 85% interest in entities
that own the name, image and likeness of Elvis Presley and own
or have the right to use and benefit from the Graceland mansion
and related attractions, as well as other assets and revenue
streams associated with Elvis Presley and Graceland.
sale of "EPE" has been finalized.
is the information from PR Newswire.
Company is presently conducting business under the name "CKX"
and will seek shareholder approval to change the name of the
Company to "CKX, Inc."
The Presley acquisition is the first acquisition in the Company's
plan to acquire, control, develop and build content in various
forms of media. The Company's business plan is to make selective
and strategic acquisitions of, or partner with, individuals
or companies that control various forms of established or
the Company will seek to improve and enhance the development
and marketing of such content. The Company will also seek
to capitalize on the increasing distribution opportunities
that make it easier and less costly to deliver content to
consumers and which enable consumers to selectively decide
how, when and where they will consume content. Commenting
on the acquisition, Mr. Sillerman said, "We are excited to
launch CKX with our investment in the Presley assets. I can
think of no better way to introduce our artist-centered business
than to reintroduce Elvis Presley in this digital age, including
enticing opportunities in Las Vegas and outside the United
States. CKX will be all about partnering with the finest creative
talent as the methods of distribution of entertainment continue
to evolve. The old model, in which a few decision makers tell
consumers what they can see or hear, and how, when and where
they can see or hear it, is quickly disappearing. In the coming
months and years, CKX hopes to partner with or acquire developable
or already developed content as we align ourselves with the
creators of content."
a combined and audited basis, the Presley businesses had total
revenue of $44.4 million for the twelve months ended December
31, 2003, and $32.4 million for the nine months ended September
30, 2004. Operating income for those periods was $10.8 million
and $7.3 million, respectively.
income for the respective periods includes depreciation and
amortization expense of $1.2 million and $0.9 million, respectively.
As previously announced, RFX Acquisition (i) contributed $3,046,407
in cash to SPEA in exchange for 30,464,072 newly issued shares
of Common Stock; (ii) received 20,485,817 two-year warrants
to purchase shares of Common Stock at between $1.00 and $2.00
per share and (iii) acquired an aggregate of 2,240,397 shares
of Common Stock directly from certain principal stockholders
of the Company at the same price of $0.10 per share.
Sillerman and other members of senior management immediately
exercised an aggregate of five million of the $1.00 warrants.
Following the closing of the transactions, Mr. Sillerman and
other members of the Company's senior management beneficially
own an aggregate of approximately 66% of the outstanding Common
Stock and approximately 61% of the fully diluted Common Stock
of the Company, after giving effect to the exercise of all
outstanding warrants and the conversion of all outstanding
shares of preferred stock.
to a Contribution and Exchange Agreement dated December 15,
2004, by and among the Company, The Promenade Trust and RFX
Acquisition, the Trust contributed 85% of the outstanding
equity interests of the Presley business to the Company and
in exchange received, from the Company $50.1 million in cash,
1,491,817 shares of Series B Convertible Preferred Stock,
one share of Series C Convertible Preferred Stock and 500,000
shares of Common Stock of the Company.
addition, at closing, the Company paid off approximately $25.1
million of outstanding indebtedness of the Presley business.
The Trust continues to own 15% of Presley business.
share of Series B Preferred Stock has a stated value of $15.30,
is convertible into one share of Common Stock at a price of
$15.30 per share, subject to customary anti-dilution adjustment,
and entitles the holder to receive an annual dividend calculated
at a rate of 8% of the stated value. The Company also acquired
additional commercial rights to the "Presley" name from Priscilla
Presley, for a purchase price of $6.5 million.
Huff Alternative Fund, L.P. and an affiliate invested $44.8
million in cash in exchange for 2,172,400 shares of Series
A Convertible Preferred Stock, 3,706,052 shares of Common
Stock, and two-year warrants to purchase 5,581,981 shares
of Common Stock at between $1.00 and $2.00 per share Each
share of Series A Preferred Stock has a stated value of $20.00
per share and is convertible into shares of Common Stock.
conversion price of the Series A Preferred Stock, which, following
closing is $7.18 per share (approximately 2.8 shares), is
subject to adjustment upon certain issuances or exercises
of Common Stock or securities convertible into or exchangeable
for Common Stock at a price below $10.00 per share. The Company
also financed a portion of the cash consideration for the
Presley acquisition with a $39.0 million short-term senior
loan from an affiliate of Bear, Stearns and Co. Inc.
term of the loan is one year. Mr. Sillerman was the founder,
a major shareholder and served as Executive Chairman of SFX
Entertainment from its inception in 1997 until its sale to
Clear Channel Communications in August 2000. SFX Entertainment
was the largest presenter, promoter and producer of live entertainment
in the world.
to that, Mr. Sillerman was a founder, major shareholder and
served as Executive Chairman of SFX Broadcasting, a major
owner and operator of radio stations, from its inception in
1992 through its sale in 1998 to an affiliate of buyout firm
Hicks, Muse, Tate & Furst. For more detailed information see
our Current Report on Form 8-K, which may be obtained at the
SEC's web site at http://www.sec.gov. This document includes
certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
statements are based on management's current expectations
or beliefs, and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those
expressed or implied by the statements herein due to changes
in economic, business, competitive, technological and/or regulatory
factors, acquisitions of dispositions of business assets,
and the potential impact of future decisions by management
that may result in merger and restructuring charges, as well
as the potential impact of any future impairment charges to
goodwill or other intangible assets.
detailed information about these factors may be found in filings
by Sports Entertainment Enterprises, Inc. with the Securities
and Exchange Commission.
Entertainment Enterprises, Inc. is under no obligation to,
and expressly disclaims any such obligation to, update or
alter its forward- looking statements, whether as a result
of new information, future events, or otherwise.
of EPE, Source: Business Wire, 7 Feb 2005)