'American Idol' parent being sold for $1.3B

NEW YORK (CNNMoney.com) -- CKX Inc., the company behind the hit show "American Idol," said Friday it agreed to be acquired by a group led by its Chairman and Chief Executive Robert Sillerman for $1.3 billion.

The management group acquiring CKX, which owns rights to the Elvis Presley and Muhammad Ali names and the "American Idol" talent show, includes Idol creator Simon Fuller, the company said in a statement.

Shares of CKX (up $3.71 to $14.34, Charts) surged 42 percent in morning trading on Nasdaq.

Sillerman, a former radio and concert mogul, received a hand in the effort from Fuller, chief executive of CKX subsidiary 19 Entertainment Limited Inc., the British-based firm behind the "Pop Idol" television talent show and its hit U.S. spinoff, "American Idol."

Sillerman, the company's biggest shareholder, offered to enter into a complex series of transactions that includes a cash purchase of CKX's outstanding common stock at a price of $13.75 a share, which represents a 29 percent premium over the stock's closing price of $10.63.

With 97.06 million shares outstanding, that amounts to about $1.33 billion.

According to a statement, the company's directors had been actively considering the proposal and scheduled a meeting early Friday morning to consider the bid and hear the recommendation of a special committee of independent directors.

CKX also operates Graceland, Presley's former home turned tourist attraction.

-- from staff and wire reports