More trouble for Vince McMahon? WWE under scrutiny for possible violations in sale to Endeavor
WWE is getting sold to Endeavor after the latter officially announced the matter. However, just days into the sale process, WWE and chairman Vince McMahon are under investigation for possible violations regarding the sale.
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FollowWorld Wrestling Entertainment (WWE) is getting sold to Endeavor, the parent company of Mixed Martial Arts (MMA) giants Ultimate Fighting Championship (UFC), while the new owner announced that they would be merging the two businesses to create a more prominent brand of live sport and entertainment.
It all began earlier this year after Vince McMahon made his shocking return to the company as the Chairman, having retired a few months before following charges of sexual misconduct with one of his former employees. Following his return, it was announced that he was back to assist with a smooth promotion sale.
However, it seems like trouble is yet to evade McMahon, as according to Felix Upton of Ringside News, the impending sale of WWE to Endeavor is under investigation, with Ademi LLP, a law firm, scrutinising if WWE's board of directors had acquired a fair price during the sale. Upton also shared the official media release of Ademi LLP.
"Ademi LLP alleges WWE's financial outlook and prospects are excellent, and yet the transaction values WWE's shares at only approximately $106 per share (before any post-closing dividend) with Endeavor holding a 51% controlling interest in the new company and existing WWE shareholders holding a 49% interest in the new company. The transaction agreement unreasonably limits competing bids for WWE by imposing a significant penalty if WWE accepts a superior bid. WWE insiders will receive substantial benefits as part of the change of control arrangements," read the release.
"We are investigating the conduct of WWE's board of directors and whether they are (i) fulfilling their fiduciary duties to all shareholders and (ii) obtaining a fair and reasonable price for WWE," the release added. On Monday, CNN's Jordan Valinsky reported that the merger of the two companies valued UFC and WWE at $12.1 billion and $9.3 billion, respectively.
WWE's sale to Endeavor would see the latter owning the majority 51% stake in the promotion, with the remaining 49% owned by the WWE shareholders. Also, the sale would see McMahon retaining his position as the company's executive Chairman. Valinsky informed that WWE's shares to a 10% tumble during early trade after the news of the sale was made official.
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