Stifel Cuts SFX Entertainment To Hold, Fair Value Is $4

In a report published Monday, Stifel analyst Benjamin Mogil downgraded the rating on SFX Entertainment Inc SFXE from Buy to Hold, with a fair value estimate of $4. Analyst Benjamin Mogil pointed out that SFX had made no disclosures of any other expressions of interest since its go-shop period ended on Friday July 24, 2015. In the report Stiefel noted, "CEO Robert Sillerman now has 15 days to detail to the Board's Special Committee the financing details of his bid." Several events since the bid, including the company guiding to higher-than-expected Rock In Rio losses in 2015, higher operating losses leading to a dilutive private equity offering in mid-June and a deteriorating financing environment, indicate the possibility of a bid that is lower than the previous. "We view a very possible likelihood that the final bid may come in below the previous $5.25 price given continued operational weakness and the likely difficulty in financing a bid at that level," Mogil added.