Upon closing of Silver Lake’s go-private acquisition of Endeavor, Ari Emanuel will be the new company’s CEO, a member of the board of directors, and founder and executive chairman of WME.
As part of the move, he’ll be eligible to receive a $25 million “asset sale transaction bonus” and will be entitled to royalty payments from WME equal to 2.5% of the quarterly net cash profits of the agency representation business of WME and its affiliates, according to a filing with the SEC.
He’ll also receive new equity awards representing an initial award of 2.5%, made up of one-third of options and two-thirds of restricted stock units, and a supplemental award of 0.5% of the equity interests, calculated on a fully diluted basis.
Additionally, Emanuel will receive ownership of one of Endeavor’s private planes following the effective date of the merger, and the company will pay or reimburse him for reasonable costs and expenses related to the use of it for business purposes.
The merger agreement excludes TKO Group Holdings and its subsidiaries and the agency representation business of WME and its subsidiaries.
Upon payment of the asset sale bonus, Emanuel will be automatically terminated from the CEO role, though he’ll remain founder and executive chairman of WME and a board member of the private Endeavor. His right to royalty payments will terminate upon the occurrence of certain qualifying sale transactions involving WME.
Starting on the second anniversary of the closing, Emanuel will also have a one-time right to require that the company repurchase all or a portion of his company interest.
The transaction, which is subject to the satisfaction of customary closing conditions and required regulatory approvals, is expected to close by the end of the first quarter of 2025.
Under the terms of the agreement, Endeavor stockholders will receive $27.50 per share in cash, representing a 55% premium to the unaffected share price of $17.72 per share at market close on Oct. 25, the last full day of trading prior to Endeavor announcing a review of strategic alternatives.
If Endeavor accepts a “superior proposal” to Silver Lake’s offer, it would pay a breakup fee of $288.5 million. If the deal is terminated in other certain circumstances, including “a breach of Parent Entities’ obligations under the Merger Agreement,” Silver Lake would be required to pay Endeavor a termination fee of $705 million.
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