Viggle Inc. (Nasdaq: VGGL) founder Robert Sillerman wants to buy a minority stake in the company's Wetpaint business for $10 million.

The proposal comes after media mogul Sillerman offered to take another one of his companies, SFX Entertainment Inc. (Nasdaq: SFXE) private in late February for $4.75 per share. (On March 20 the company's shares opened at $4.19.) He is the CEO of both SFX and Viggle.

Wetpaint operates a celebrity news site. New York-based Viggle, which developed a mobile application that gives members redeemable rewards points for watching television shows or listening to music, acquired Wetpaint in 2013. 

Sillerman's acquisition proposal would give him a 25 percent stake in Wetpaint and the option to buy the rest of the business for $40 million. He'd pay for the rest of Wetpaint with $20 million in cash and  a five-year note bearing interest at 6 percent. Viggle's board of directors is expected to form a special committee to evaluate the proposal.

Viggle has been on Mergers & Acquisitions Distressed Company Watch List for months because a history of recurring losses and working capital deficiencies led its accountant to raise substantial doubt about the company's ability to continue as a going concern, or without the threat of liquidation.

The business has been featured in our Turnaround Tuesday column several times, most recently when Sillerman provided it with a $2 million loan in January for working capital. He has provided Viggle with about $8.75 million in unsecured loans, according to a March 18 filing with the U.S. Securities and Exchange Commission.

Viggle has a sales agreement a subsidiary of SFX Entertainment Inc. (Nasdaq: SFXE), under which SFX acts as exclusive sales agent for the sale of advertising and sponsorships. 

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