If you are a current investor in Ticketmaster Entertainment Inc (NASDAQ:TKTM)
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Live Nation Inc. Ticketmaster Entertainment Inc. announced yesterday that Ticketmaster shareholders would receive 1.384 shares of Live Nation stock for each share of Ticketmaster they hold. Based on Live Nation's February 10, 2009 closing price of $4.82, the transaction is valued at $6.67 per Ticketmaster share.
According to the press release the investigation by a law firm focuses on the legal ramifications of the proposed merger of Ticketmaster Entertainment, Inc. (Nasdaq:TKTM)
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. Ticketmaster shareholders would hold 50.01 percent of the new company, while Live Nation shareholders would have 49.99 percent. 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.
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"
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?'"
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’
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 also launched an investigation.
If you are a current investor in Ticketmaster Entertainment Inc (NASDAQ:TKTM)
Email: mail@shareholdersfoundation.com
or
phone: (858) 779 – 1554
You can also contact us at:
Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
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Mail@ShareholdersFoundation.com
www.ShareholdersFoundation.com
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