Shareholders Sue Vince McMahon, Nick Khan, Triple H & Others Over 'Sham Sale' Of WWE
28/11/2023 09:35
A group of WWE investors has sued Vince McMahon, Nick Khan, and others, alleging a "sham sales process" that led to WWE & UFC merging into TKO Group Holdings.
THR is reporting that the lawsuit was unsealed in the Delaware Court of Chancery on November 22nd, accusing McMahon of pushing a "quick sale" of WWE to Endeavor Group.
The lawsuit labeled Endeavor CEO Ari Emanuel as a "close friend and longtime ally" of McMahon's, alleging that the "sham sales process" was mustered by the WWE Board of Directors after Emanuel proposed a deal allowing the 78-year-old billionaire to continue as Executive Chairman of TKO Group Holdings and avoid any scrutiny in regard to the sexual misconduct allegations that led to his temporary retirement from WWE.
The lawsuit is filed against McMahon, Khan, Triple H, and former co-Presidents George Barrios and Michelle Wilson among others.
The lawsuit further alleges that the sale process was designed to favor Endeavor Group and eliminate any other bidders who would seek to expel McMahon and that at least two cash offers under better terms were outright rejected.
The lawsuit also claims that even though bidders submitted cash offers to WWE at a value of $95-$100 and $90-$97.50 per share, the WWE Board allegedly failed to make counterproposals because those offers would have cashed out WWE stockholders and blocked McMahon from moving his shares.
The specific companies are kept anonymous in the lawsuit but are described as "major institutions with significant access to capital… [with] compelling reasons to close an acquisition of WWE."
The lawsuit further states that "If McMahon was found to have breached his duty of loyalty, WWE stockholders could have sought his removal as a director. Such scrutiny appears to have prompted McMahon to seek a 'quick' sale of the Company that also allowed him to continue running WWE. Not only did he secure a future for himself at post-merger WWE, McMahon also stuffed his pockets and those of his loyalists before agreeing to a deal."
Last but not least, the lawsuit alleges the $21 billion price tag of the TKO-WWE merger undervalued WWE and is "far below the offers"that the WWE Board could have negotiated had it made any fair attempts to negotiate in bona fide interest.
The lawsuit was filed by an Ohio pension fund and seeks to represent all stockholders who cashed out their shares when WWE and UFC merged into TKO Group Holdings.
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