Corporate takeovers are never as simple -- and painless -- as a mere change in letterhead. Two weeks after the news that SFX Entertainment would be taking over the financially distressed Livent, leadership of the theatrical producer will change hands once again. Chief Executive Officer Roy Furman will step down, as will President David Maisel, June 25. Furman will remain chairman of the Board of Directors.
Livent's new CEO will be its current executive vice president, Rob Webster. A former partner at KPMG Peat Marwick's mergers and acquisitions division, Webster has been in charge of the investigation into Livent's "accounting irregularities" and its "Debtor-in-Possession" bankruptcy proceedings.
In a statement, Webster praised outgoing CEO Furman's leadership skills during "an extremely difficult period" and said he was pleased Livent could still draw upon Furman's experience. For his part, Furman said Webster's "financial acumen" made him "the ideal person to lead Livent." Furman also expressed satisfaction over SFX Entertainment's "meaningful bid" for Livent, and for the Tony-winning success of Fosse. The courts are currently reviewing SFX Entertainment, Inc.'s $115 million bid to buy Livent Inc., with a major hearing expected July 7. Livent attorney Jim Badenhausen told Playbill On-Line a procedural hearing was held June 9.
SFX and Livent jointly announced June 1 that they have "entered into a definitive purchase agreement" for SFX to acquire Livent's assets -- including its theatres and current and future shows -- in exchange for cash, deferred payment rights and warrants to purchase SFX common stock at premiums.
Livent, the producing company and theatre owner, filed for bankruptcy in 1998 after new management discovered what it called accounting irregularities and the financial hemorrhaging could not be stemmed. SFX, the world's largest diversified promoter, producer and venue operator for live entertainment events, is expected to close on the deal on or about Sept. 30.
As part of the agreement, SFX will acquire the Ford Center for the Performing Arts in New York, the Pantages Theatre in Toronto and the Ford Center for the Performing Arts-Oriental Theatre in Chicago. The Ford Centre for the Performing Arts in Vancouver and Livent's Toronto headquarters building are not part of the agreement, but SFX will enter into a lease of Livent's headquarters.
SFX is a promoter, producer and venue operator for live entertainment, running concert amphitheatres and booking rock and pop shows, but it also owns Pace Entertainment, one of the major producers of legit national tours operating in nearly 40 Pace subscription markets throughout the U.S.
In a way, SFX is already engaged to Livent: Pace is set to present the scaled-down, reconstituted national tour of Ragtime, which will use elements from the previous Chicago and touring Ragtime troupes, opening in August 1999. It was Pace that rescued a foundering Livent national tour of Ragtime, abandoned by the producer, in fall 1998. That tour closed in March 1999 in Boston.
With Livent's venues, assets and aborning shows, Pace's Broadway and road muscle would expand considerably -- Livent product would likely go to Pace-controlled markets before they would show up elsewhere.
Toronto is now assured of a healthy competition between the Livent-run Pantages and the Princess of Wales and the Royal Alexandra (both run by the Mirvish family). The 10-year-old Livent staging of The Phantom of the Opera is scheduled to close at the Pantages in September 1999.
Livent is the financially troubled but artistically respected producer of such 1990s fare as Kiss of the Spider Woman, Show Boat, Ragtime and Fosse. The assurance of new product, such as The Seussical and other in-development works, is the good news of the deal, according to some. "We all need product," said regional booker Alan Lichtenstein, who presents shows at non-Pace venues in Detroit.
SFX, run by executive chairman Robert F.X. Sillerman, is thought to be offering $100 million for Livent's assets, according to The New York Times.
It is estimated that Livent's creditors are owed about $200 million.
Experts estimate the Livent empire to be worth $60 to $80 million. The Ford Center alone is reported to have cost Livent more than $30 million.
Cablevision Systems, Ogden Corp., Walt Disney and Back Row Productions (linked to London theatre landlord Stoll Moss) have been mentioned as parties interested in the company since its financial unraveling in late 1998.
-- By Kenneth Jones
and Robert Simonson