Endeavor Lowers IPO Price Range to $26-$27, Reduces Volume of Shares for Sale

Endeavor Group Holdings has lowered the target price range for its IPO and reduced the number of shares that will be available for sale to the public as of Friday.

In a Securities and Exchange Commission filing Thursday, Endeavor said its target IPO price would fall between $26 and $27 a share, down from $30 to $32 as established last week. Endeavor has also cut the number of shares for sale to 15 million, from 19.4 million.

The move comes amid reports of a lukewarm response to Endeavor’s IPO pitch from institutional investors. A source close to the situation described Endeavor’s adjustment of the offering as an effort to be “conservative and realistic” about the current IPO environment.

The change in the target price means Endeavor will likely raise around $361 million from the IPO, down from the projected $550 million. The final IPO price is expected to be disclosed after the close of trading today, with the stock to debut Friday under the ticker symbol EDR. The underwriters have the option to buy another 2.2 million shares, which could bring the proceeds to $419 million.

Endeavor’s market cap is expected to start out at around $6.5 billion, with enterprise value pegged at $10 billion-$10.5 billion.

Endeavor’s limited free cash flow and heavy debt load have raised some red flags on Wall Street. On Wednesday, financial website Motley Fool did a deep dive on the IPO that questioned whether pressure on the company to stay within certain earnings-to-debt ratio per its loan covenants is a factor in the IPO timing. Endeavor has said the IPO proceeds will be used in part to pay down debt, which stands at about $4.6 billion.

“So while the company is portraying this offering as an opportunity for investors to get in on a modern large-scale entertainment platform, a skeptic might view the IPO as tapping the equity markets to bail the company out of a near-term debt payment it may or may not have expected,” analyst Billy Duberstein wrote for Motley Fool.

The parent company of UFC, WME, IMG and other holdings is positioning itself as a growth company that will leverage the new world order in media to profit through content ownership and by creating more lucrative opportunities for talent.

Endeavor’s collection of assets has been assembled through an acquisition spree during the past five years, which has left the company with a complicated balance sheet and debt obligations. The goal as asserted by Endeavor CEO Ari Emanuel is to create a network effect for talent among the company’s disparate operations in entertainment, sports, fashion, content production, live events and licensing and merchandising.

“As the entertainment industry moves toward a closed ecosystem model with less transparency, our clients and businesses need more insight, resources and solutions than ever before,” Emanuel wrote in the letter included in the Endeavor prospectus filed in May. “We believe being a public company will only further accelerate our ability to look around corners and open up new categories and opportunities for those in the Endeavor network.” 

More Biz

  • Nick Cannon Drew Barrymore Lauren Lake

    NATPE 2020: Industryites Hope Marquee Names Help Drive Daytime Turnaround

    A little momentum goes a long way in daytime. After a long slump, the first-run syndication market has come back to life this year with several high-profile new talk shows headed for this year’s NATPE conference in Miami, which runs Jan. 21-23. Nick Cannon is extending his multimedia endeavors into daytime. So is actor-entrepreneur Drew [...]

  • Mandatory Credit: Photo by Richard Sowersby/REX/Shutterstock

    Joint Sky & NBC News Channel Confirmed, Set To Rival CNN & Bloomberg

    Comcast confirmed plans to launch a global news platform with Sky News at the launch of its highly anticipated streaming offering Peacock. Variety understands that the channel will be a brand new service that exists independent of Sky News and NBC News, with bases likely to be set up in London and New York and a [...]

  • Recording Academy President/CEO Deborah Dugan participates

    Grammy Shocker: Deborah Dugan Ouster Was a ‘Coup,’ Insiders Say

    As the music industry reeled in the wake of Deborah Dugan’s sudden removal from her post as president/CEO of the Recording Academy on Thursday — a mere five months after she’d taken charge, and just ten days before the Grammy Awards — even insiders were stunned by the abruptness of the move and perplexed by [...]

  • Peacock Launch: NBCUniversal Tries New Way

    Peacock Launch: NBCUniversal Tries New Way to Deliver Old-Fashioned Bundle of TV

    In the big unveiling Thursday on the “Saturday Night Live” stage at 30 Rock, NBCUniversal leaders described Peacock as a 21st century iteration of a broadcast network. For sure, the Comcast answer to the streaming wars is taking a broadcasters’ approach to programming and distributing the service that Comcast hopes might eventually represent the next [...]

  • Maoyan Entertainment

    FountainVest Buys Stake in China's Maoyan Entertainment

    Asian private equity firm, FountainVest Partners has acquired a significant minority stake in Chinese film ticketing and distribution firm Maoyan Entertainment in a deal worth about $134 million dollars. Maoyan listed its shares on the Hong Kong Stock Exchange in an IPO last year. FountainVest owns 92.6% of shares in Interstellar Investment, which in turn [...]

  • Weinstein Trial

    D.A. Accuses Weinstein Defense of Excluding White Female Jurors

    A prosecutor accused Harvey Weinstein’s defense team on Thursday of systematically excluding young white women from the jury. Seven jurors have been selected so far, but none of them are white women. On Thursday afternoon, the defense eliminated at least seven white women from two panels of prospective jurors. Joan Illuzzi, the lead prosecutor, made [...]

  • Artist Partner Group Promotes Miles Beard

    Artist Partner Group Promotes Miles Beard to Senior VP, Powers up Leadership Team

    Artist Partner Group (APG) has strengthened its senior leadership team with several staff promotions, including: Miles Beard to SVP of A&R; Eli Piccarreta to VP of A&R; Jessica Kelm to VP of Digital Marketing; while Nikisha Bailey has been hired as VP of A&R Admin & Operations. Beard, Piccarreta, and Bailey will report to CEO Mike Caren, [...]

More From Our Brands

Access exclusive content