Endeavor Group, parent of Hollywood’s biggest talent agency and owner of the Ultimate Fighting Championship martial arts franchise, shelved plans to list on Friday, after it faced limited investor interest, according to a person briefed on the matter.
The decision casts the market for initial public offerings in a dim light. Shares in high-end exercise equipment maker Peloton on Thursday closed 11 per cent lower on its first day as a public company, and WeWork this week postponed plans for an immediate listing.
The entertainment empire, founded in 1995 by Ari Emanuel, planned to price its shares on Thursday evening and earlier in the day had revealed that it had sharply scaled back the size of its planned IPO.
The revised offering would have seen Endeavor raise as much as $465.8m, according to an updated filing with the Securities and Exchange Commission, a third less than the amount it had sought earlier this month.
Including an option allowing underwriters to purchase additional shares, Endeavor had planned to offer a total of 17.25m shares of common stock in a price range of $26 to $27. On September 16, it launched plans to offer 22.2m shares in a price range of $30 to $32 that could have seen it raise as much as $712m.
The revised offering would have seen the group valued at about $7.2bn at the midpoint of the new price range, excluding any value attributable to a special class of voting shares held by private equity backer Silver Lake and certain executives.
That was down from the $8bn it targeted earlier this month and nearer to the $6.3bn valuation it commanded in 2017 when it scored a $1bn investment from the Canada Pension Plan Investment Board and Singapore’s sovereign wealth fund, GIC.
The company did not immediately return requests for comment.
Since absorbing the William Morris Agency, which represents the likes of Rihanna and Charlize Theron, and sports agency IMG, Endeavor has made a foray into fashion, marketing and sports. More than 70 per cent of its $3.6bn in revenue last year came from creating or licensing original content, according to securities filings.
Endeavor had planned to list as an umbrella partnership corporation, or Up-C — an organisational structure known for granting tax benefits to company insiders.
In early September teeth-straightening company SmileDirectClub joined a list of more than 70 companies that have used Up-C structures since 2010, according to Dealogic. SmileDirect has lost almost 40 per cent of its value since its IPO earlier this month.
Shared office space provider WeWork also intended to use a similar arrangement, before postponing its IPO.
Additional reporting by Eric Platt and James Fontanella-Khan.