Silver Lake Eyes $7.79bn Deal to Take Endeavor Private

Private equity firm Silver Lake has confirmed it is working on a proposal that would take sports media and talent agency Endeavor private.

Silver Lake is Endeavor’s single biggest shareholder, commanding 71 per cent of all voting power and has two executives on the board of directors.

It has no interest in selling its shares to a third party nor any intention of entertaining any bids for Endeavor, which is currently conducting a formal review into its ‘strategic alternatives’.

The agency added that no deadline or definitive timeline had been set for the review’s completion, and made no assurances an outcome would come out of the review. Endeavor has also ruled out a sale of any interest in TKO Group Holdings, the company formed by the merger between the Ultimate Fighting Championship (UFC) and World Wrestling Entertainment (WWE).

“Given the continued dislocation between Endeavor’s public market value and the intrinsic value of Endeavor’s underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders,” said Ariel Emanuel, chief executive of Endeavor (pictured).

Endeavor’s stock rose by 24 per cent in extended trading as a result of both announcements.

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Having seen a majority stake in its rival Creative Artists Agency (CAA) sold at a reported US$7bn valuation to Francois-Henri Pinault, Endeavor is clearly exploring whether it can do a deal of its own.

While CNBC reports Endeavor’s market value to still be high at around US$7.79 billion, its share price has declined over the past year. Emanuel calling out the ‘dislocation’ between the worth of the company’s shares and its own valuation of the agency’s assets suggests frustration at its falling valuation even after completing the merger of UFC and WWE.

Silver Lake’s voting power majority means it is able to decide whether to approve an offer to take the company private. However if it does this, it will have to compensate public stockholders at fair market valuation.

Source:  Sportspromedia

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