After chairman Robert F.X. Sillerman missed yesterday's deadline to finalize his go-private offer for SFX Entertainment, which valued the company at $3 per share, its stock has since plummeted to $1.39 as of market closing today. The directors of SFX have "authorized the continued exploration of strategic alternatives for the Company, including the sale of all or substantially all of the Company’s assets in whole or in part."
Now, before we all get too carried away with notions of the SFX empire finally splitting up, let's look at the fine print of the press release:
Sillerman continues to be interested in taking the Company private, either alone or with one or more strategic partners, although also at a lower price given the Company’s share price has declined substantially below that in the merger agreement.
Really, all that missing this deadline has caused is a loss of investor confidence and the opening up of SFX's assets to competing bids. If Sillerman ends up taking SFX private after all, an outcome which I can easily still see happening, this will be remembered as a masterful coup of business perfectly aligned with his past maneuvering. This could end up being a clever man's road to a 50% discount: sure, he'll have to contend with other offers, but will that be an issue?
We'll have to wait and see.