WWE UFC merger: ‘this is good for Endeavor shareholders’

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on Apr 3, 2023
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  • UFC owner Endeavor Group agreed to buy WWE on Monday.
  • LightShed Partners' Brandon Ross discussed the news on CNBC.
  • Both Endeavor and WWE stocks are trading in the red today.

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World Wrestling Entertainment Inc (NYSE: WWE) is in focus this morning after Endeavour Group Holdings Inc (NYSE: EDR) said it will buy the integrated media company for about $9.3 billion.

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Pro reacts to the announced acquisition

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The UFC owner has agreed to pay $106 a share for the said acquisition – a more than 20% premium on the price at which the WWE stock closed last week.  

Endeavour will own 51% of the combined company. With $21.4 billion of enterprise value, this new sports and entertainment firm will trade as “TKO” on the New York Stock Exchange.

The press release also named Ari Emanuel (Endeavor CEO) the Chief Executive of the joint entity while Vince McMahon of WWE will act as its Executive Chairman. Reacting to the announcement, LightShed Partners’ Brandon Ross said:

It’s a deal that everyone thought was inevitable. McMahon wanted to be involved in company. Emmanuel had his eyes on getting bigger and owning more. [Plus], there weren’t any other buyers of WWE.

Ross shares his outlook on Endeavor stock

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Endeavor will get to name six directors to the board of the new company whose name is yet to be announced. The remaining five will be appointed by WWE.

“EDR” is trading down on the stock market news today. Sharing what this agreement means for the Endeavor stock on CNBC’s “Squawk Box”, LightShed’s Ross added:

Investors have been valuing all of Endeavor too inexpensively. The implied valuation on it is like five times in this transaction, it’s got to be eight plus times. I think this is good for Endeavor shareholders.

Wall Street currently rates Endeavor stock a “buy” with upside to $31 on average – about a 40% premium on its current price.

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