CKXE buyout deal

**yuanheli** Thu Dec 13, 2007 11:59 am

CKXE buyout deal
Hi Blast,

How do you think of CKXE?

It is also a CEO buyout. Financing is secured according to their SEC filings. Target price is $13.00 + 0.2 shares of their 50% controlled company FLXE (?). FLXE is 50% owned by CKXE. They will distributed the FLXE shares to CKXE share holders. Originally it was $13.75 cash plus 0.1 share of FLXE. The price could be modified by subtracting $0.75 cash and adding 0.1 share of FLXE, down to cash amount $11.75 at mininum. Targeted closing date is April/2008. Now CKXE is trading at around $10.75. Of course nobody knows how much FLXE is going to worth. And also, here the CEO is really really treacherous and not trustable at all. He bought/sold/opened numerous companies, and could play many many tricks to steal shareholders' benefit.

**blast_investor** Thu Dec 13, 2007 2:19 pm

Hi yuanheli,

This CKXE looks promising for closing. I don't know that much on valuation of the stock verses buyout price. But at quick look, presumably CEO of CKXE knows what he is paying for in management buyout deal.

Do you have information on CEO's past "treacherous " record? Those record may shed light on the insider buyout motivation of the deal.

**blast_investor** Thu Dec 13, 2007 10:52 pm

Hi yuanheli,

I now believe this deal is not likely to succeed. The closing won't happen any time soon, and deal may fail eventually.

The reason is that the original merger agreement did not require lender commitment letter from lenders.

The recent press release dated on OCt 31, 2007 :
http://ir.ckx.com/ReleaseDetail.cfm?ReleaseID=272414

Said that "The letters, which have not yet been signed "

Unsigned commitment letter has no legal power. In other word, no lender commited to lend money for this deal.

In current credit condition, I don't believe any bank will be willing to lend to this CKXE buyout deal. Without loans from banks, the merger can not be closed.

The deal is very strange. CKXE company should never have agreed to a leveraged buyout deal without lender commitment letter. CKXE CEO is playing ugly game with public shareholders.

**yuanheli** Fri Dec 14, 2007 10:00 am

CKXE buyout deal
Hi Blast,

Thanks so much for digging out the critical details here. Before you pointed out this crucial matter, I did not notice the letter was unsigned. I just noticed it has financial commitments provided to CKXE, but felt something wrong here. The original deal was announced and accepted by CKXE board in a single day, and the deal was then revised and postponed in September 28 and then accepted by the board again in a single day. I guess the CEO has 100% control of the board.