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Silver Lake weighs private takeover of Ari Emanuel's Endeavor

Oct 26, 2023

Endeavor CEO Ari Emanuel. Photo: Chris Unger/Zuffa LLC

Endeavor's run as a public company could be over in less than three years as its largest shareholder Silver Lake considers taking it private.

Why it matters: A buyout by Silver Lake, which holds a 71% voting stake in Endeavor, would take the $10 billion-plus company off the stock market and put it back in the hands of private owners who believe its current valuation is misunderstood by the market.

Driving the news: Endeavor said after the market closed Wednesday that the company would explore strategic alternatives, with CEO Ari Emanuel citing "the continued dislocation between Endeavor's public market value and the intrinsic value of Endeavor's underlying assets."

  • Less than two hours after that announcement, Silver Lake said it was weighing an offer.
  • "Silver Lake firmly believes in Endeavor's business and is not interested in selling its shares in Endeavor to a third-party nor in entertaining bids for assets that are a part of Endeavor," the firm said in its own release.
  • Silver Lake's co-CEO Egon Durban and managing director Stephen Evans sit on Endeavor's board.
  • Endeavor said it is not exploring selling its interest in the newly formed TKO Group that encompasses the WWE and UFC.

The big picture: Taking Endeavor public was always a risky bet for Emanuel. Spinning out the UFC, one of its main revenue drivers, into a separate company risked it even further.

  • Endeavor's stock was trading as high as $35 a share in January 2022; it closed Wednesday at $17.72.
  • After Wednesday night's news hit, the stock soared more than 20% Thursday, to nearly $22 per share after the open.
  • Meanwhile, TKO Group has fallen 23% since it first began trading last month.

Between the lines: A week before Endeavor closed its WWE acquisition, French billionaire François-Henry Pinault agreed to buy a majority stake in Endeavor rival CAA at a $7 billion valuation.

  • There's no love lost between Emanuel and CAA and its co-chairman Bryan Lourd.
  • "We're worth a lot more and we have more morals," Emanuel said earlier this month during a Bloomberg conference.

Catch up quick: Endeavor's been looking for ways to increase the value of its stock and help pay down its $5 billion in debt.

  • In April, the company sold IMG Academy to EQT $1.25 billion in cash, which removed an odd-fitting asset from its balance sheet.
  • Emanuel also confirmed that Endeavor was one of the U.S. firms that made a bid for a stake in the PGA Tour.
  • Endeavor's other assets include the talent agency WME, IMG, OpenBet, On Location, ad agency 160Over90, Professional Bull Riders, the Frieze Art Fair and the Miami Open tennis tournament.
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