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FX Real Estate Prepares for $100M Rights Offering

LAS VEGAS-The owner of 18 acres at Las Vegas Boulevard and Harmon Avenue gives its stockholders the right to purchase one share of the company for every two shares they own.

By Brian K. Miller | Updated on February 05, 2008

LS VEGAS-FX Real Estate and Entertainment Inc., the publicly held owner of 18 acres at Harmon Avenue and the Las Vegas Strip, filed a registration statement regarding its rights offering, whereby it will offer its stockholders the right to purchase for $10 one additional share of company stock for every two shares they currently hold as of a date that has yet to be determined. In early afternoon trading, shares of the company were trading at $7.74, down $0.14 on the day.

Holders of approximately half of the company’s 40 million outstanding shares waived their right to participate in the offering, but FXRE chairman and chief executive Robert F.X. Sillerman and the Huff Alternative Fund LP have agreed to purchase shares that are not otherwise subscribed for the rights offering. As a result of the “backstop” agreements, the company expects to sell all of the shares being offered in the offering, resulting in gross proceeds of $98.7 million.

FX Real Estate and Entertainment owns 17.72 contiguous acres of land on the southeast corner of Las Vegas Boulevard and Harmon Avenue, which it refers to as the Park Central site. In July, FX paid Africa-Israel Investments Ltd. $180 million for the 50% interest in the property it did not already own. The property is currently occupied by a motel and several commercial and retail tenants. FXRE intends to pursue a hotel, casino, entertainment, retail, commercial and residential development project on the site that would have an Elvis Presley theme.

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