Ticketmaster Entertainment Inc. merger with Live Nation fair to investors? Investigation Announced

Feb. 10, 2009 - PRLog -- While Ticketmaster Entertainment Inc was hit with a C$500 million ($410 million) lawsuit in Canada and a lawsuit in US on Monday, concert promoter Live Nation Inc. and ticketing giant Ticketmaster Entertainment Inc. announced today Ticketmaster shareholders would receive 1.384 shares of Live Nation stock for each share of Ticketmaster they hold. Ticketmaster shareholders would hold 50.01 percent of the new company, while Live Nation shareholders would have 49.99 percent. Considering the market price for Live Nation stock from today of $4.89 Ticketmaster shareholder would receive an equivalent of about $6.77 for each TKTM share they hold. In addition an investigation was announced on behalf of Ticketmaster Entertainment Inc  investors alleging that the transaction is unfair, given that, among other things, Ticketmaster shares traded above $10.00 as recently as November 2008.


If you are a current investor in Ticketmaster Entertainment Inc  or a current shareholder in Live Nation Inc , you have certain options and if you want to stay informed about the deal and the lawsuit in Canada you should contact the Shareholders Foundation, Inc. at

Email: mail@shareholdersfoundation.com

or

phone: (858) 779 – 1554

In addition the Shareholders Foundation, Inc. has set up a poll for Live Nation Inc investors  and Ticketmaster Entertainment Inc shareholder whether they think the offer is fair. Go to

www.ShareholdersFoundation.com

The companies estimated the value of the combined business at $2.5 billion and said the deal would help them save about $40 million annually. . The boards of both companies have approved the transaction.
But the deal was generating controversy even before it was announced.

Addressing antitrust concerns Ticketmaster Chairman Barry Diller said "Ticketmaster does not set prices. Live Nation does not set ticket prices. Artists set the prices," without mentioning the ticket surcharges Ticketmaster relies on for much of its revenue.  Assuming it gets approval by antitrust authorities, the companies hope to complete the merger in the second half of the year.

However, the merger comes just as Ticketmaster is under fire for recently redirecting people buying tickets to a Bruce Springsteen show from its regular Web site to its reselling subsidiary, TicketsNow. Ticketmaster was hit on Monday with a US lawsuit complaining about the company’s sales practices for redirecting fans, including those trying to buy Springsteen tickets Feb. 2, to TicketsNow.com where the tickets were marked up by hundreds and even thousands of dollars. In the complaint filed Feb. 6 in Los Angeles Federal Court the plaintiff alleges that Ticketmaster gets a 15 per cent cut from TicketsNow, which it owns. “Ticketmaster profits twice as the result of the monopolistic scheme,” so the lawsuit, which seeks unspecified monetary damages. The “Defendants have illegally bilked event ticket purchasers out of millions of dollars” and the lawsuit seeks an injunction to stop the practice.

Springsteen, in a posting on his website, said that “we perceive this as a pure conflict of interest,” and “The abuse of our fans and our trust by Ticketmaster has made us as furious as it has made many of you.” Springsteen recently posted a statement on his Web site saying the merger between Ticketmaster and Live Nation could end up "returning us to a near-monopoly situation in music ticketing."

Ticketmaster, based in West Hollywood, Calif., issued an apology Feb. 4 for having steered Springsteen fans to TicketsNow and vowed to refund them the price difference between the face value of tickets and those purchased inadvertently through the reseller.

On Monday Ticketmaster was now also hit by a $410million lawsuit in Ontario, Canada claiming Ticketmaster made a similar up-selling move in November for a Smashing Pumpkins concert and “conspired to divert tickets to popular events” from its main website to its own ticket auction website, www.TicketsNow.com. The representing plaintiff in the lawsuit also claims that he had recently bought two concert tickets for $533.65 including service charges on TicketsNow.com. The lawyers are claiming that their client would have only had to pay $133.00 for the pair if they were available on Ticketmaster’s main website. The lawyers plan to ask the  judge to allow one plaintiff to represent all the other ticket buyers in a group lawsuit. A hearing for this certification motion hasn’t been set. Laws prohibiting the resale of event tickets for more than their face value are also in place in Alberta, Saskatchewan and Manitoba and lawyers said they plan to file similar suits in those provinces.
Even though the Canadian lawsuit was filed on the same day as a similar American action, the suits are unrelated, according to lawyers.

New Jersey's attorney general launched an investigation.

If you are a current investor in Ticketmaster Entertainment Inc  or a current shareholder in Live Nation Inc  you should contact the Shareholders Foundation, Inc. at

Charles Schumer, a Democratic senator from New York who sits on the Senate Judiciary Committee released a statement Tuesday opposing the merger, calling the Springsteen ticketing debacle a "bait-and-switch" scam and that "It is very hard to trust Ticketmaster". He said the " merger would give a giant, new entity unrivaled power over concertgoers and the prices they pay to see their favorite artists and bands", and  “it must be viewed skeptically and scrutinized with a fine-toothed comb by the Justice Department and the Federal Trade Commission.”

Analysts believe the Ticketmaster-Live Nation combination could lower some ticket prices because the two companies could present a united front to artists when negotiating business deals surrounding tours. The companies are also seeking to fill more seats in venues that are going empty.

Bill Pascrell Jr., a Democratic representative of New Jersey, called for the House Judiciary Committee to hold hearings after news of the potential merger broke.

Neil Portnow, president of the National Academy of Recording Arts and Sciences, took a balanced view of the deal and said "Music's had a tough time obviously. So to the extent that there can be some efficiencies and you can run a better business, that's something that we have to look at as something pragmatic. On the other hand, the question becomes, `Does this create too much authority and power and control under one roof?'"

Live Nation shares fell 30 cents, or 5.7 percent, to $4.99 in afternoon trading Tuesday, while Ticketmaster shares dipped 27 cents, or 4.1 percent, to $6.30.

Ticketmaster sells tickets for more than 80 percent of the major arenas and stadiums in the U.S., according to concert tracking firm Pollstar. Live Nation is the world's No. 1 concert promoter and owns more than 140 venues. It has comprehensive rights deals covering the tours of such artists as Madonna, Jay-Z, U2 and Shakira.


If you are a current investor in Ticketmaster Entertainment Inc  or a current shareholder in Live Nation Inc , you have certain options and if you want to stay informed about the deal and the lawsuit in Canada you should contact the Shareholders Foundation, Inc. at

Email: mail@shareholdersfoundation.com

or

phone: (858) 779 – 1554

In addition the Shareholders Foundation, Inc. has set up a poll for Live Nation Inc investors  and Ticketmaster Entertainment Inc shareholder whether they think the offer is fair. Go to

www.ShareholdersFoundation.com


You can also contact us at:

Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
Tel:+1-(858)-779-1554
Fax:+1-(858)-605-5739
Mail@ShareholdersFoundation.com
www.ShareholdersFoundation.com
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