Electronic dance music company SFX Entertainment has signed a $774 million merger agreement that would give Southampton entertainment executive Robert F.X. Sillerman control of the 62.6 percent of the concert producer that he does not already own, the company announced Tuesday.
Shares of the Manhattan-based company jumped 19.90 percent to close at $4.94.
In February, Sillerman, former chancellor of Southampton College and onetime holder of an interest in Elvis Presley's Graceland, offered an initial proposal for $4.75 per share to take over the remainder of SFX, where he has served as chairman and chief executive since it was founded in 2011.
The company's board of directors unanimously approved a revised deal for $5.25 per share under which an affiliate of Sillerman would take the company private subject to conditions, including receiving a majority of votes from unaffiliated stockholders.
Stockholders also could elect to retain stock in the company in lieu of cash, subject to conditions and limitations, the company said in a news release. The revised offer of $5.25 represents a premium of 42 percent over SFX's closing share price of $3.70 on Feb. 24, the last trading day before Sillerman made his initial offer.
The merger agreement also provides for a 45-day "go-shop" period, during which the special committee formed by the board of directors to evaluate Sillerman's proposal will solicit alternative bids.
A rival bidder whose proposal is accepted would have to pay a $7.8 million termination fee, the company said.
Sillerman, who recused himself during the board's vote on the transaction, agreed to vote his shares in favor of any "superior proposal" that has a value of at least 2.5 percent more than his highest offer.
Sillerman was a major shareholder of CKX Inc., which owned "American Idol" and licensing rights to Elvis Presley and his Graceland estate, before the company was acquired by a private equity firm.
SFX stages live events under brands including Tomorrowland, Mysteryland and Electric Zoo. Earlier this month it posted a net loss of $41.6 million for the quarter ended March 31, though revenue climbed 56.6 percent to $52.2 million compared to the year-ago period.
SFX produced 251 events during the quarter, attracting 751,000 fans, the company said.