Topline
Ultimate Fighting Championship’s parent company Endeavor acquired World Wrestling Entertainment, the companies announced Monday, bringing together two of the best-known sports entertainment brands in the U.S. into a single public company — though analysts say the terms of the deal may be misleading.
Vince McMahon will be chairman of the board at the new WWE/UFC company.
Key Facts
The deal, which the companies said valued at WWE at $9.3 billion, will result in a new firm held 51% by existing Endeavor shareholders and 49% by existing WWE shareholders.
That enterprise value for WWE represents a 73% premium since McMahon returned to the company in January.
Shares of Endeavor jumped as much as 6% in pre-market trading but were flat by market open at 9:30 a.m. ET, while WWE shares dipped 8.5% to $83.50, a seemingly curious slide given the deal supposedly valued WWE at $106 per share.
Cannonball Research analyst Vasily Karasyov noted in an email to Forbes the acquisition Monday is not a “‘sale’ exactly” given WWE shareholders are not being bought out.
And that means the “headline valuations are meaningless” in the deal, LightShed analyst Brandon Ross wrote to Forbes, explaining investors are reacting to the underlying valuations assigned to the newly formed company by the JP Morgan-led bankers overseeing the deal.
The yet-to-be-named joint company will trade on the New York Stock Exchange under the ticker TKO, a nod to the abbreviation for technical knockout.
Key Background
Several outlets reported Sunday a WWE sale to Endeavor was imminent. McMahon will be chairman of the new company’s board and Dana White will continue to lead UFC, the companies said Monday. McMahon left WWE last summer following several sexual misconduct allegations against him and the revelation he paid $12 million in hush money to his accusers. But the 77-year-old McMahon came back to the company January 5 with a sale on his mind. WWE shares surged more than 20% in the week following McMahon’s comeback.
Forbes Valuation
McMahon is worth $2.9 billion, according to Forbes’ most recent calculations, up roughly $600 million since he resigned from WWE in June.
Further Reading
WWE Shares Are Up 23% Since Vince McMahon’s Return—Despite Slide Following Saudi Sale Rumors (Forbes)
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Derek Saul