‘American Idol’ parent CKX agrees to buyout

CKX Inc., owner of the “American Idol” brand, said Wednesday that it had agreed to a revised buyout offer valued at $1.19 billion from a group led by CKX Chief Executive Robert F.X. Sillerman, called 19X Inc.

The revisions include an increased breakup fee payable to CKX if the acquisition isn’t completed by a new deadline of Oct. 31, CKX said.

New York-based CKX will also conduct a new “go shop” period of 45 to 60 days while the company seeks better offers.

19X’s offer is for $12 a share. The $1.19-billion transaction value is based on 99 million common and preferred shares outstanding, the company said. 19X would also assume $100 million of debt.

Sillerman, who is chairman of both companies, had offered $13.75 a share when he originally proposed the buyout in June 2007. He reduced the offer May 12, citing a “seismic shift in the buyout world since the time we originally entered into this transaction.”

The increased breakup fee involves an additional $500,000 payable in cash and a reduction of the value of any stock used to pay the initial $37 million fee to $11.08 a share from $12, CKX said.

Sillerman would pay CKX 256,016 additional CKX shares as a result of the reduced stock price as part of the breakup fee.

CKX also said that some members of its management, including Sillerman and director Simon Fuller, agreed that if the company received an offer of more than $12 a share, management stockholders would pass on the amount more than $12 to all other CKX shareholders until they had received $13.25 a share.

At that point, all stockholders would get an equal share.

CKX shares gained 26 cents, or 2.6%, to $10.47.