NEW YORK – America may not find out the winner of this season's popular TV show "American Idol" until the end of the month, but the fate of its parent company is clear.
Media company CKx Inc., which owns proprietary rights to "Idol" and "So You Think You Can Dance," said Tuesday is being sold to a private equity group for about $511 million in cash.
CKx also owns the rights to the name, image and likeness of Elvis Presley and Muhammad Ali.
The buyout group, led by Apollo Global Management, agreed to pay $5.50 per share for CKx, a 24 percent premium to the stock's closing price Monday of $4.45. Shares rose $1.02, or 22.9 percent, to $5.47 in morning trading Tuesday.
The company had about 92.9 million shares outstanding as of March 31.
The board and The Promenade Trust, a group that benefits Lisa Marie Presley and is the company's partner managing the Elvis Presley name, support the deal, as does Robert F.X. Sillerman, the company's largest shareholder with a nearly 21 percent stake. A cash tender offer is expected to start soon and expire in 20 days.
Goldman Sachs Bank USA provided a debt financing commitment in connection with the deal.
The news came as New York-based CKx repoirted net income of $7.2 million in the first quarter, or 8 cents per share, compared to a net loss of $5 million, or 5 cents per share, a year ago.
Revenue fell 20 percent to $53.3 million from $66.6 million, last year.
"We believe that our strategy of focusing on our core properties, including the resurgent 'American Idol' and 'So You Think You Can Dance,' which will begin airing its new season on May 26, will lead us to a successful 2011," said CEO Michael Ferrel.
CKx also operates Presley's Graceland and has proprietary rights to the "Idol" and "So You Think You Can Dance" brands, including the "American Idol" series in the U.S. and other local adaptions in more than 100 countries.
Copyright © 2011 The Associated Press. All rights reserved.
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