Land values seen as factor in CKX going private

Jun 5, 2007 6:57 AM

Again last week, the value of Las Vegas real estate became a motivator in a deal that will take a public company — CKX Inc. (CKXE) — private while it plans to build a casino complex on the Las Vegas Strip.

CKX Inc. is an entertainment company that owns licensing rights to the names and images of Elvis Presley and Muhammad Ali, as well as rights to the show "American Idol." It also operates Elvis’ Graceland estate.

But included among the company’s holding is a 50% stake in 18 acres of developable land with an option to acquire the other 50% of the property for $180 million. The company said it plans to pursue a retail, hotel, casino, commercial and residential development project on this strip of Las Vegas property.

Also in its portfolio, the company said, is a 13% interest in Riviera Holdings Corporation (RIV) whose directors are currently reviewing a $34 per share offer from a suitor.

In an announcement last week, the company said under that if its plan to take the company private is approved, shareholders will receive $13.75 a share and a stake in FX Luxury Realty, an affiliate company owned by CEO Robert F.X. Sillerman. It will be effected through a merger with 19X, a private company owned by Sillerman in partnership with a company director, Simon Fuller.

As part of the transaction, CKX, whose share price skyrocketed in trading following the announcement, acquired 50% of FX Luxury Realty for $100 million in cash. FX Luxury also received the license rights to use the Elvis Presley and Muhammad Ali names to develop real estate and attraction-based projects such as themed hotels and casinos.

In a statement, Sillerman said, "We thought it best to provide our stockholders a capital realization opportunity as well as the opportunity to participate in a new public company that will develop real estate and location-based projects that exploit CKX’s iconic intellectual property content."