Initiated in in February, the rights offering gave stockholders the right to purchase for $10 one additional share of company stock for every two shares they held as of March 6. 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. The rights offering expires April 11.

FX Real Estate and Entertainment's main asset is 17.7 acres at Harmon Avenue and the Las Vegas Strip known as the Park Central site, which is currently occupied by a motel and several commercial and retail tenants. In July, FX paid Africa-Israel Investments Ltd. $180 million for the 50% interest in the property it did not already own. In an annual filing this month, the company detailed a $3-billion redevelopment plan that includes 3,047 hotel rooms, a 93,000-sf casino and 94,000 sf of retail for the 17.7-acre site located across Las Vegas Boulevard from MGM's $7.4-billion Project Citycenter, which is well under construction and scheduled to open in late 2009.

The project is expected to have an Elvis Presley theme. FXRE has entered into license agreements with Elvis Presley Enterprises Inc., an 85%-owned subsidiary of publicly traded CKX Inc., and Muhammad Ali Enterprises LLC, an 80%-owned subsidiary of CKX, which allows it to use the intellectual property and certain other assets associated with Elvis Presley and Muhammad Ali in the development of its real estate and other entertainment attraction-based projects. The license agreement with Elvis Presley Enterprises also grants FXRE the right to develop one or more hotels as part of the master plan of Elvis Presley Enterprises Inc. to redevelop the Graceland property and surrounding areas in Memphis.

Sillerman now owns approximately 34.5% (13.77 million shares) of FX Real Estate and 30% of CKX, which earlier this month acquired 19 Entertainment Ltd., the UK-based company best known for creating the American Idol television program, and entered into a long-term agreement with Simon Fuller, the founder and the creative force behind the company. Huff's aggregate interest is approximately 2.8 million shares.

In addition to the Strip property, FX Real Estate, directly and through subsidiaries, owns 1.4 million shares of Riviera Holdings Corp., owner and operator of the Riviera Hotel & Casino on the Strip and the Blackhawk Casino in Blackhawk, CO.

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