Private equity firm Silver Lake Management intends to sell off parts of Endeavor Group after it takes the entertainment company private, Bloomberg News reported Friday.
Silver Lake, which holds a 71% voting stake in Endeavor, will deliver a bid to the company’s independent directors in the coming weeks, the report said, citing people familiar with the private equity firm’s plans.
Silver Lake in October said it was working on a proposal to take Endeavor private after superagent Ari Emanuel’s firm said it was exploring “strategic alternatives” — Wall Street talk for considering the sale of all of a company or some of its parts because its stock had failed to gain any traction.
Wall Street analysts have agreed the company built through the acquisition of dozens of businesses is worth more than the current $6.92 billion market cap, but point to a “disconnect” with investors, who are unsure how all of the parts fit together. The 2023 writers’ and actors’ strikes didn’t help. It also carries a heavy debt load of $5 billion, analysts note.
Endeavor shares closed Thursday at $22.93, below the $24 shares were offered at in the company’s 2021 IPO. The stock got a 4% boost in morning trading on the news Friday, rising to $23.97.
The company includes the William Morris Endeavor talent representation, IMG sports betting and marketing, events management including New York Fashion Week, media production and content distribution, among other operations. In September, it spun off TKO Group, created through the combination of UFC and WWE. Endeavor holds 51% of TKO.
Any sale would not include the talent representation business, Bloomberg reported.
Silver Lake has been discussing the deal with potential backers, including Abu Dhabi wealth fund Mubadala Investment Co., the report said.
Endeavor’s directors would be expected to hire advisers to evaluate the Silver Lake plan once it is submitted before deciding on the next steps.
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