A group of former WWE shareholders have filed a class action lawsuit alleging that events leading up to this year’s merger of WWE and Endeavor’s UFC to form the TKO Group led to a “sham sale process” designed to sell Vince Putting McMahon in power, bringing other things and finishing. Bidder.
The lawsuit, unsealed Monday in Delaware Chancery Court, accuses the defendants of breach of fiduciary duty: seven members of WWE’s board of directors, including McMahon and Paul “Triple H” Levesque. It alleges that the board’s actions under McMahon’s leadership ultimately resulted in a deal “designed to favor Endeavor and exclude other bidders.” [to] Ax McMahon.”
Read the shareholder case here.
McMahon, who was fired as WWE president and CEO in 2022 amid sexual assault and harassment allegations and the subsequent investigation by the board, eventually returned with a newly installed board and announced a “strategic review process” (i.e. a sale of the company). . “A move that, according to the lawsuit, McMahon “maneuvered to ensure his power and control over the company amid growing shareholder discontent and government investigations into his illegal predatory behavior.”
The lawsuit continues: “McMahon immediately turned to his longtime friend and Endeavor CEO Ari Emanuel, who McMahon knew would allow him to remain at the helm of the company after the deal.”…Then WWE’s board of directors – which was controlled by McMahon – engineered a sham sale process designed to favor Endeavor and exclude other bidders McMahon sought.
The lawsuit states that WWE began signing nondisclosure agreements with potential bidders on February 6, 2023. “The following day, Endeavor made a proposal to combine Endeavor’s Ultimate Fighting Championship (“UFC”) subsidiary with WWE in a cash and stock transaction in which WWE shareholders would receive consideration of $88.43 per share.
The lawsuit alleges that in addition to Endeavor, there were three other suitors for WWE, two of which made a higher cash-per-share offer (all three names have been redacted from the filing).
“As of March 13, 2023, WWE received three additional offers to acquire the entire company: [redacted] made a cash offer of $95 to $100 per share, [redacted] made a cash offer for $90 to $97.50 per share and [redacted] “Made a cash offer at an implied share price of $76.83,” the report said. “But since these offers were all aimed at taking advantage of WWE shareholders (including McMahon – signaling his complete exit from the company and likely the wrestling world), the board never bothered to make a counter proposal. [redacted].”
Ultimately, the lawsuit says, the process led to the all-stock deal, made official in September, in which WWE and UFC merged to form TKO Sports, with Endeavor owning 51% of the company and former WWE shareholders 49%. “The implied merger price for former WWE shareholders at that time was $95.66 per share – which was lower than both. [redacted] Opening cash offers,” the lawsuit states.
The deal named Emanuel, Endeavor’s CEO, as CEO of TKO, with McMahon as executive chairman. Nick Khan, another defendant in the lawsuit, was named president of WWE.
TKO Sports began trading on the NYSE on September 12.
Source: Deadline
Elizabeth Cabrera is an author and journalist who writes for The Fashion Vibes. With a talent for staying up-to-date on the latest news and trends, Elizabeth is dedicated to delivering informative and engaging articles that keep readers informed on the latest developments.
