Endeavor has seen a surge in after-hours trading after news that the talent agency and sports group was “exploring strategic opportunities.”
In a press release issued Wednesday, the company shared its intent to explore talks that could result in a sale while noting that it will not consider a sale or disposition of the company’s stake in TKO Group Holdings:
Endeavor Group Holdings, Inc. (NYSE: EDR) (“Endeavor” or the “Company”), a global sports and entertainment company, today announced the initiation of a formal review to evaluate strategic alternatives for the Company.
As part of this review of strategic alternatives, the Company will not consider the sale or disposition of the Company’s interest in TKO Group Holdings, Inc.
“Given the continued dislocation between Endeavor’s public market value and the intrinsic value of Endeavor’s underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders,” said Ariel Emanuel, CEO of Endeavor.
Endeavor has not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any particular outcome. The Company does not intend to comment further regarding the review of strategic alternatives until it determines disclosure is necessary or advisable.
Since the announcement, the Endeavor stock has grown significantly in its after-hours trading.
The news of this exploration comes after the majority purchase of rival CAA (Creative Artists Agency) by billionaire Francois-Henry Pinault for a reported $7 billion, per Alex Sherman of CNBC.
Endeavor holds a 51% stake in TKO Group Holdings with the merger finalized last month and the company trading on the New York Stock Exchange.
The TKO stock closed at $78.72 on Wednesday, which was over 2% for the day.
The Endeavor stock closed at $17.72 on Wednesday and is trading at nearly $22 at the last check in the after-hours trading.
TKO Group Holdings is set to release its third-quarter earnings report on November 7 while Endeavor will report its earnings the next day.
Silver Lake, which controls approximately 71% of the Endeavor voting power has stated it aims to take the company private:
Silver Lake is working on taking Endeavor private.
Silver Lake is already a major shareholder in Endeavor.
Again, this wouldn’t directly affect TKO. pic.twitter.com/OWufbogRFo
— Brandon Thurston (@BrandonThurston) October 25, 2023