With the company’s stock price hovering around the $6 dollar range (symbol: TKTM), could Ticketmaster Entertainment, the world’s dominant ticket company, be ripe for a takeover? Or, could management be thinking of taking advantage of the low stock price to buy up the shares and take it private?
Highly unlikely, according to industry insiders, partly because the company is just a couple of months from being spun off as a standalone entity from IAC/InterActiveCorp. In addition, there are the hundreds of millions of dollars of debt the ticket company is carrying, and the fact that it just put its faith in the hands of Front Line Management’s Irving Azoff, one of the smartest, most powerful and influential people in the live entertainment industry.
But, the question of going private or being a takeover target is not so farfetched, considering the changes that have taken place in the in the ticketing industry over the past few years. Ticketmaster’s stock closed at $5.87 today, November 14, down nearly 7 percent from Thursday’s close of $6.29, and down from an all-time high of $27 in late August. The valuation gave the company a market cap of about $330 million, only $20 million more than what eBay paid for StubHub just under two years ago. See stock ticker below.
“I don’t expect Ticketmaster to go private,” said one financial analyst, speaking of entertainment, ticketing and consumer-based firms. “There are a lot of companies in this market with no debt and excess cash that would be taken private before it.”
“This could make sense if an investor felt like they could take the company private, ride out the recession, re-tool the company to be much leaner operationally, and sort out the artist/ticketing synergies,” said one industry veteran and broker. “Maybe even buy Live Nation too… could be anyone’s guess. In any case, get things sorted out with the hope of doing an IPO in the future when so much uncertainty about the global economy and the live entertainment business has been sorted.”
Ticketmaster did not reply to a request seeking comment about the chances of such a development. The company has taken an aggressive path to maintaining its dominant position, including acquisitions, layoffs and an experiment with changing some of its ticketing to incorporate no-fee, “all-in” pricing.
“But is it true? I don’t know. If there are people actually making something like this happen, you could probably count them all on one hand, and they certainly aren’t going to talk to anyone about it,” the broker added.