WWE Under Investigation Over Endeavor Deal
WWE management might be celebrating its landmark deal with Endeavor but the company is now under investigation by a law firm because of the sale.
The Endeavor Group officially announced on the morning of the 3rd of April 2023 that it had agreed to a $21 billion deal to form a new company that will encompass both UFC and WWE in the biggest shake-up in the wrestling world in decades.
Vince McMahon will become Executive Chairman of the parent company which will own both WWE and UFC while WWE CEO Nick Khan will become President of the brand and Dana White will continue in his role as UFC President.
The deal also gives UFC a valuation of $12.1 billion with WWE valued at $9.3 billion. The new company will run under the TKO ticker on the New York Stock Exchange and will be known as NewCo until it is named.
As a result of the deal, WWE stock soared on Tuesday, 4th of April, closing at $97.23 – up $7.93 from Monday’s closing value. That value is the highest that the stock price has reached since April 19th, 2019 when it closed at $98.50.
However, in spite of the deal and the bump in the stock price that resulted Adami LLP – a law firm with specialisms in shareholder litigation – has announced that they will be undertaking an investigation into the deal to see if shareholders are really getting what’s best for business. A statement from Ademi LLP in relation to the investigation reads:
“Ademi LLP is investigating WWE (NYSE: WWE) for possible breaches of fiduciary duty and other violations of law in its transaction with Endeavor.
“Ademi LLP alleges WWE’s financial outlook and prospects are excellent and yet the transaction values WWE’s shares at only approximately $106 per share (before any post-closing dividend) with Endeavor holding a 51% controlling interest in the new company and existing WWE shareholders holding a 49% interest in the new company. The transaction agreement unreasonably limits competing bids for WWE by imposing a significant penalty if WWE accepts a superior bid. WWE insiders will receive substantial benefits as part of change of control arrangements.
“We are investigating the conduct of WWE’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for WWE.”
The deal between Endeavor and WWE has been signed but the deal is not expected to go through for several months.