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Silver Lake, a prominent private equity firm and the largest investor in Endeavor Group Holdings, announced on Tuesday its agreement to privatize the talent and entertainment agency for a staggering USD 13 billion. The deal entails Endeavor stockholders receiving USD 27.50 per share in cash, a remarkable 55% premium over the closing price prior to Silver Lake’s expressed interest in October. 

As of December 31, Silver Lake holds approximately 31% of Endeavor’s outstanding shares, solidifying its position as the largest shareholder. The decision to take Endeavor private was prompted by Silver Lake’s announcement late last year, following Endeavor’s own exploration of alternative strategies to enhance its valuation. While Endeavor considered various options, it ruled out selling or disposing of its majority interest in TKO Group Holdings, a separate entity housing assets like WWE and Ultimate Fighting Championship. 

It’s noteworthy that TKO Group Holdings remains unaffected by this transaction and will continue as a publicly traded company. The financing for this monumental deal will be a blend of fresh and reinvested equity from Silver Lake, supplemented by additional capital from investors including Mubadala Investment Company and DFO Management. The deal is slated to conclude by the end of the first quarter of 2025, following formal approval from Endeavor’s executive and special committees. 

Under the leadership of Hollywood heavyweight Ari Emanuel, Endeavor has evolved from its origins in talent representation to a diversified sports and entertainment juggernaut, propelled by over 20 strategic acquisitions. Emanuel, along with Endeavor Executive Chairman Patrick Whitsell and Silver Lake, collectively hold an impressive 91.5% of Endeavor’s voting stock through a special class of shares, as disclosed in regulatory filings. 

Although the deal will not be subject to a vote by minority shareholders, as legally mandated, it is common practice for controlled companies to opt for such a vote to preempt potential legal challenges seeking a higher price. Silver Lake’s precedent in this regard, seen in its 2013 privatization of Michael Dell’s computer company, involved a modest price adjustment following pressure from activist investors like Carl Icahn. Despite Endeavor’s special committee’s request for a minority shareholder vote, Silver Lake has declined, as confirmed by a knowledgeable source. 

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