New lawsuit filed challenging WWE-UFC merger.
A pension fund has filed a lawsuit against Vince McMahon, Nick Khan, Paul Levesque (Triple H) and more that challenges the merger between WWE and UFC, which was made official in September.
The lawsuit, which was filed by shareholders, was filed on November 22 in Delaware.
The lawsuit alleges that McMahon pushed a “quick sale” of WWE to Endeavor chief Ari Emanuel, who is labeled as McMahon's “close friend and longtime ally” who "proposed a sweetheart deal" that allowed the McMahonl to stay on as executive chairman of TKO Group and avoid scrutiny in connection with sexual misconduct allegations. According to the complaint filed by investors, WWE board members “conjured up a sham sales process” designed to favor Endeavor and “exclude other bidders seeking to axe” McMahon, disregarding at least two all cash offers with betters terms.
According to the complaint, companies submitted cash offers at $95-$100 and $90-$97.50 per share. But because they contemplated cashing out WWE stockholders and barred McMahon from rolling over his shares, which would’ve signaled his “complete ouster” from the wrestling world, the board “never bothered to make” counterproposals, the suit states.
“If McMahon was found to have breached his duty of loyalty, WWE stockholders could have sought his removal as a director,” states the suit. “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,” states the complaint.
The suit argues that the $21 billion price tag undervalues WWE. It’s “far below the offers” the board could’ve obtained from multiple other bidders had it “made any effort to negotiate in good faith,” investors claim.
Block & Leviton LLP is counsel for the pension fund. Palkon is represented by Bernstein Litowitz Berger & Grossmann LLP.
Since the lawsuit, McMahon has sold 8.4 million of his TKO shares.
Fans can learn more about the lawsuit by clicking here.
