NEW YORK (TheStreet) -- SFX Entertainment (SFXE) shares are up 22.82% to $5.06 in trading on Tuesday after the New York City-based concert promoter agreed to be taken private by CEO Robert Sillerman who offered to purchase the 62.6% of outstanding shares that he does not already own.
Sillerman will pay $5.25 per share in cash in a deal that values the company at approximately $490 million.
The company's board agreed to the deal with conditions including a 45 day "go shop" period where the company will actively solicit competing takeover bids with any successful competing bidder being on the hook for a $7.8 million Sillerman bid termination fee.
Sillerman agreed to vote his shares for a competing bid if it exceeds his final offer by more than 2.5%.
SFX Entertainment went public in October 2013, debuting at $13 per share.
TheStreet Ratings team rates SFX ENTERTAINMENT INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SFX ENTERTAINMENT INC (SFXE) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins, generally disappointing historical performance in the stock itself and generally high debt management risk."