The purchases are related to the company's rights offering, which ended in April. All told, Sillerman and Huff have acquired in recent weeks 5.3 million shares and 3.8 million shares, respectively. The purchases represent approximately 18% of the company's 49.66 million outstanding shares. Including previously acquired stock, Sillerman now owns 13.78 million shares (27.7%) of the company and Huff and its affiliates now own 6.61 million shares (13.3%) of the company.
FXRE's Las Vegas property at Harmon Avenue and the Las Vegas Strip is known as the Park Central site. The site is currently occupied by a motel and several commercial and retail tenants. FXRE took full ownership of the site in July, paying Africa-Israel Investments Ltd. $180 million for the 50% interest in the property it did not already own. In a March SEC filing, FXRE detailed a $3-billion redevelopment plan for the site that includes 3,047 hotel rooms, a 93,000-sf casino and 94,000 sf of retail.
Initiated 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 agreed to purchase shares that are not otherwise subscribed for the rights offering. As a result of the "backstop" agreements, the company sold all of the shares being offered in the offering, resulting in gross proceeds of $98.7 million.
The development on the site 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 owns 30% of CKX, which earlier this month agreed to be acquired by 19X Inc., an affiliate of another Sillerman led company, 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. CKX said the latest bid is being reviewed by the special board committee that recommended the original deal.
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.
In connection with its purchase of shares, the Huff funds received the right to appoint a designee to serve on the FXRE's Board of Directors. Huff selected as its director designee Bryan Bloom, the legal counsel of W.R. Huff Asset Management Co. and its affiliates for the past 14 years. FXRE also appointed to the board Michael Meyer, the founding partner of 17 Broad LLC, a diversified investment vehicle and securities consulting firm. Before 17 Broad, Meyer served as Managing Director and Head of Credit Sales and Trading for Bank of America from 2002 through 2007.
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