Silver Lake ‘locks in $1.1bn TEG dividend recap’

TEG’s owner Silver Lake has secured a A$1.1 billion (€663.8 million) dividend recapitalisation for the Australian live entertainment giant after attempts to sell the company stalled, according to recent media reports.

The Australian Financial Review listed KKR Credit Markets and Singapore government-owned investment firm Temasek as among the biggest backers in a joint proposal alongside The Canada Pension Plan Investment Board (CPPIB), with five lenders signing up overall as part of the debt refinancing package.

A dividend recap happens when a firm takes on new debt in order to pay a special dividend to private investors or shareholders. AFR sources say “the new debt facility includes a $950 million, five-year, covenant-lite loan at a margin of 550 basis points, and a $130 million revolver”.

The AFR describes the move as “a good outcome by any standards” for Silver Lake and co-owner Mercury Capital.

“KKR and Temasek investing together is the type of high-quality creditor you’d want in a debt stack while CPPIB oversees $600 billion in members’ money distributed via the type of global investment programme that AustralianSuper or Aware Super would love to emulate,” it notes.

Silicon Valley-based Silver Lake acquired the TEG Live and Ticketek parent from another investment company, Affinity Equity Partners, in 2019

While Temasek, KKR, Silver Lake and TEG declined to comment to Bloomberg on the report, The Edge Malaysia says the deal – which was locked in just before Christmas 2023 – will give Silver Lake Management a payout after talks to offload TEG proved unsuccessful.

Silicon Valley-based Silver Lake acquired the TEG Live and Ticketek parent from another investment company, Affinity Equity Partners, in 2019 in a reputed A$1.3bn deal and reportedly launched a sales process for TEG last year. However, Silver Lake’s asking price for TEG was believed to be around 50% higher than what the company was valued at by potential bidders.

TEG’s portfolio also includes TEG Sport, TEG Experiences, TEG Dainty, SXSW Sydney, TEG MJR, TEG Van Egmond, TEG Rockefeller, Qudos Bank Arena, Softix, TicketCharge, TicketWorld, Ticketek Singapore and Ovation.

Silver Lake also owns shares in Oak View Group, City Football Group and Madison Square Garden Sports, along with a 71% stake in WME owner Endeavor.

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Read Sillerman’s parting words to SFX staff

Robert FX Sillerman has officially stepped down as CEO of SFX Entertainment.

It was announced when SFX declared bankruptcy on 1 February that company founder Sillerman (pictured) would resign as CEO but remain as chairman. IQ revealed later that month that the dance music promoter, which floated on the New York Stock Exchange in October 2013 for an IPO of US$13 per share, had debts of $490 million, much of it owed to companies bought by SFX and still awaiting deferred purchase price payments.

Below is Sillerman’s farewell letter to SFX staff, circulated on Tuesday (29 March) and obtained by Billboard:

As most of you are aware Thursday, March 31, will be my last day as CEO of SFX. I will remain as Chairman of the Board. The disappointment I know we all feel should not be the lasting impression that remains. We had a bold vision, a revolutionary one. That we stumbled along the way can never detract from the energy and hope that brought us all together. As we enter this next phase, despite the place we find ourselves, there is much to be proud of. It remains incumbent on all of us to refocus our energies and find the path to success that is out there. I am confident that with renewed discipline combined with passion and creativity that our original goals can and will be met.

As Chairman I remain available to help in any way that I can. I maintain both an emotional and financial interest in our company’s success and intend to participate as and when called upon. As such this is anything but a goodbye; rather a reset of roles with a renewed emphasis on collaborative success. While we aren’t where we wanted to be, and will be, it has been an honor [sic] and a pleasure.