Value of CKX increased under revised agreement with 19X

By Lisa Kerner

Charlotte, N.C., Sept. 28 - CKX, Inc. will distribute all of its shares of FX Real Estate and Entertainment Inc. to CKX stockholders, rather than 50% of the shares as initially planned. The distribution is being made in connection with CKX's deal to sell the company to 19X, Inc. for $13.75 per share, a company news release stated.

CKX entered into a series of transactions on Sept. 26 and Sept. 27, reported in a form 8-K filing with the Securities and Exchange Commission, that resulted in the following:

• CKX, with other members of FX Luxury Realty, LLC, contributed 100% of their common membership interests in FX Luxury to FX Real Estate in exchange for shares of common stock of FX Real Estate;

• CKX agreed to loan up to $7 million to FX Real Estate; and

• CKX acquired an additional 0.742% of the outstanding common stock of FX Real Estate for $1.5 million.

CKX also amended its existing revolving credit facility to allow for the exchange of its membership interests in FX Luxury for shares of common stock of FX Real Estate, the loan to FX Real Estate, the acquisition of common stock of FX Real Estate and the distribution of the FX Real Estate shares.

Under the revised agreement, 19X will pay each shareholder $13.75 in cash minus a percentage of the incremental increase in value currently being received by shareholders. The maximum adjustment will not exceed $2.00 per share. In addition, the cash consideration will be reduced by 7.5% of the average trading price of the additional shares of FX Real Estate being distributed to CKX stockholders during a future trading period, the release stated.

The amended merger agreement includes a new 30-day "go-shop" period.

Including the dividend declared in June, CKX stockholders will receive two shares of FX Real Estate for every 10 shares of CKX.

The sale of CKX will be accomplished through a merger with 19X, a private company owned and controlled by Robert F.X. Sillerman, chairman and chief executive officer of CKX, and Simon R. Fuller, a director of CKX and the CEO of 19 Entertainment Ltd., a CKX subsidiary.

"By allowing CKX to pass along the value of the FX Real Estate and Entertainment shares directly to its stockholders, we are able to potentially increase the total value received by the stockholders while, at the same time, modestly reducing the cash needed to close the buyout," Sillerman said in the release.

On Aug. 1, CKX's board amended the June 1 merger agreement with 19X, providing a 60-day extension to the original July 31 deadline for obtaining a financing commitment. The "outside date" for completion of the merger had been extended an additional 60 days to April 25, 2008. Recent disruptions in the credit markets were to blame for the delay, it was previously reported.

New York-based CKX owns and develops entertainment content. 19 Entertainment is based in London and produces entertainment properties, including "American Idol."

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