Contradicting Business Week Report (March 6), SFX Entertainment Denies CBS Deal

News   Contradicting Business Week Report (March 6), SFX Entertainment Denies CBS Deal Following a report by Gene G. Marcial in the March 6 issue of Business Week stating that CBS might be interested in a "big stake" in SFX Entertainment, SFX Entertainment has announced that it has no deal or negotiations pending with CBS.

Following a report by Gene G. Marcial in the March 6 issue of Business Week stating that CBS might be interested in a "big stake" in SFX Entertainment, SFX Entertainment has announced that it has no deal or negotiations pending with CBS.

The entire SFX statement reads as follows: "While the company's policy is typically not to comment on rumors or speculation, SFX firmly denies that it is in any negotiation whatsoever with CBS or any of its related companies on any transaction involving either an investment in SFX or a combination with SFX."

CBS is being acquired by Viacom at this time.

Prior to this announcement, SFX has established much of its corporate image in connection with its own prolonged acquisition program that has involved numerous high-profile sports and entertainment companies and agencies. A sprawling corporate entity (Business Week called it "the new gorilla of live entertainment events"), SFX develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets. An integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally, SFX has 122 venues overall, and owns or operates venues in 31 of the top 50 domestic markets.

Contacted for comment, an SFX spokesperson said that "there was nothing to add " to the company's statement. SFX stock is currently trading at 35 1/8, up from 31 13/16 at the previous close. At its peak last July, SFX was trading at 51 5/8.

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On Jan. 5, SFX executive chairman Robert F. X. Sillerman announced that he had acquired an additional 361,080 shares of the company's Class A Common Stock through the exercise of options. A prepared statement indicated that these options had exercise prices of $16.08 and $20.45 per share. These purchases are in addition to Mr. Sillerman's acquisition of 737,964 shares through open market purchases and options exercised in the last quarter of 1999.

At that time, SFX indicated that Sillerman had represented to the Company that at no time had he sold any of his shares in SFX nor did he have "any present intention of selling stock being purchased in connection with the exercise of the options, or any other stock. "

Sillerman was quoted in the Jan. 5 SFX paper statement saying that his options expired in 2008 but that by acting now he was ensuring himself "capital gains treatment for the appreciation I expect in the stock.''

In the March 6 Business Week report, Marcial gave the stock ranges listed above and quoted an "investment banker familiar with the situation" as having said that, "These [CBS] talks could lead to a buyout, but Sillerman won't sell for less than 70."

-- By Murdoch McBride