A bunch of former WWE shareholders has filed a class-action lawsuit alleging that the occasions main as much as the merger of WWE and Endeavor’s UFC into TKO Group this 12 months resulted in a “sham sales process” designed to maintain Vince McMahon in energy and minimizing different bidders.
The go well with, made public Monday in Delaware Chancery Court, asserts breach of fiduciary obligation claims towards the defendants: seven members of the WWE board that embrace McMahon and Paul “Triple H” Levesque. It claims the actions of the board led by McMahon orchestrated an eventual deal “designed to favor Endeavor and exclude other bidders seeking [to] axe McMahon.”
Read the shareholder lawsuit right here.
McMahon, who was pressured out by the board as WWE president and CEO in 2022 amid sexual abuse and harassment allegations an an ensuing investigation, ultimately returned with a newly put in board and introduced a “strategic review process (i.e., a sale of the Company),” a transfer that, in keeping with the go well with, was McMahon “maneuvering to secure his power and control over the Company in the face of mounting stockholder discontent and government investigations into his illegal predatory behavior.”
The go well with added: “McMahon instantly approached his long-time pal and Endeavor CEO Ari Emanuel, whom McMahon knew would permit him to stay on the helm of the post-transaction Company. … Thereafter, the WWE Board—which was managed by McMahon— conjured up a sham gross sales course of designed to favor Endeavor and exclude different bidders looking for axe McMahon.
The go well with stated WWE started signing confidentiality agreements with potential bidders on February 6, 2023. “The very next day, Endeavor submitted a proposal to combine Endeavor’s Ultimate Fighting Championship (‘UFC’) subsidiary with WWE in a cash and stock transaction where WWE stockholders would receive consideration equivalent to $88.43 per share.”
The go well with claims there have been three different suitors for WWE apart from Endeavor, two of which submitted increased per-share money gives (all three names have been redacted from the submitting).
“By March 13, 2023, WWE had received three additional offers to acquire the entire Company: [redacted] submitted a cash offer at $95-$100 per share, [redacted] submitted a cash offer for $90-$97.50 per share, and [redacted] submitted a cash offer at an implied share price of $76.83,” it famous. “But because these offers all contemplated cashing out WWE stockholders (including McMahon—signaling his complete ouster from the Company and likely the wrestling world), the Board never bothered to make a counterproposal to [redacted].”
Eventually, the go well with claims, the method led to the all-stock deal made official in September merging WWE and UFC into TKO Sports, with Endeavor proudly owning 51% of the corporate and former WWE stockholders proudly owning 49%. “The implied Merger consideration for former WWE stockholders was, at the time, $95.66 per share—which fell below both [redacted] opening all-cash offers,” the go well with claims.
The deal noticed Endeavor CEO Emanuel put in as TKO’s CEO, with McMahon its govt chairman. Nick Khan, one other of the lawsuit’s defendants, was named WWE’s president.
TKO Sports started buying and selling September 12 on the NYSE.
Discussion about this post