Endeavor’s $13 billion deal highlights push to sidestep minority shareholders

By Jerry  Published On May 20, 2024
May 17 (Reuters) – Endeavor Group’s (EDR.N), opens new tab decision to deny minority shareholders the ability to veto a $13 billion deal to take the entertainment conglomerate private is the latest example of a company’s controlling investors risking lawsuits to avoid paying a higher deal price.
At stake is a corporate governance safeguard that reassures minority investors they are getting a fair price and protects companies’ stock market valuations from taking a hit on concerns a deal would undervalue them, corporate lawyers and investment bankers say.
Endeavor agreed last month to be taken private by a consortium of its investors, led by private equity firm Silver Lake, which holds 71% of the voting stock in the company. It inked the deal without agreeing to hold a vote where a majority of the investors not participating in the consortium would have to approve it.
Without such a “majority-of-the-minority-investors” threshold, a deal vote becomes a formality, since the shareholders that control the company are also the ones buying out the minority investors.
Source: REUTER

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