SFX Entertainment has been hit with a lawsuit seeking compensation for allegedly misleading investors in CEO and chairman Robert Sillerman's bid to take the company private.

The lawsuit refers to the acquisition proposal as a "sham process" designed to make the firm attractive to a third-party purchaser and maintain the share price before it was caught by its liquidity problems, reports Billboard, after a copy of the complaint was obtained by the publication.

The filing claims to represent the class ...