Merger Monday is back with two notable deals to start April. UFC parent Endeavor Group agreed to takeover in World Wrestling Entertainment via a merger. Meanwhile, Extra Space Storage is acquiring Life Storage to form a real estate investment trust behemoth. WWE, Endeavork and EXR stock retreated Monday after their respective announcements.
Endeavor, WWE Merger
Ultimate Fighter Championship parent Endeavor Group announced it will buy a 51% majority stake in WWE early Monday. The deal creates a "live sports and entertainment powerhouse" valued at $21.4 billion, Endeavor said in its announcement.
The transaction values UFC at $12.1 billion and WWE at $9.3 billion, and will close in the second half of the year, pending regulatory approval, according to the release.
WWE shareholders will roll all existing equity into a new entity that will serve as the parent of UFC and WWE. The new company will be named at a later date and intends to list on the New York Stock Exchange under the ticker "TKO" after the deal is finalized. UFC and WWE will each contribute cash to the new company so it holds approximately $150 million.
And following the deal closing, Endeavor intends to sweep all excess cash at UFC and new company shareholders, other than Endeavor, will receive a post-closing dividend.
Endeavor CEO Ariel Emanuel will continue in his role and lead the new company. WWE Executive Chairman Vince McMahon will serve as executive chairman of the board, which will consist of six Endeavor appointees and five WWE nominees. Mark Shapiro will serve as president and COO of Endeavor and the new company. And Dana White and Nick Khan will continue in their roles as CEO of UFC and WWE, respectively.
WWE had been looking for a buyer for months, a move that had pushed up shares. WWE stock fell 2% Monday after opening down 7%.
EDR stock briefly topped a 24.50 buy point Monday morning, but reversed hard to trade down 5.8% to 22.54 at the closing bell.
Extra Space Storage, Life Storage
Real estate investment trust and storage container operator Extra Space Storage announced Monday it will buy Buffalo, N.Y.-based peer Life Storage for $12.7 billion in an all-stock deal. It's expected to close in the second half of the year.
Per terms of the deal, Life Storage shareholders will receive 0.8950 EXR shares for each LSI stock they own. That's equal to $145.82 per share based on Extra Space's March 31 closing price of $162.93.
Life Storage previously rejected an $11 billion bid from competitor Public Storage.
EXR stock retreated 5.17% Monday following the news. LSI stock climbed 3.6%. PSA stock also rose 1.8%.
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