Wall Street reacts negatively to today’s TKO acquisitions and share repurchase program

Today’s TKO news of acquiring PBR, On Location, and IMG didn’t go down well with Wall Street and the stock is down around 9% at time of this writing.

Under the terms of the agreement, TKO will acquire the Endeavor assets for a total consideration of $3.25 billion, based on the 25-trading-day volume-weighted average price of TKO’s Class A common stock for the period ending on October 23, 2024.

Endeavor will receive approximately 26.14 million common units of TKO Operating Company, LLC and will subscribe for an equal number of shares of TKO’s Class B common stock, with Endeavor expected to own approximately 59% of TKO alongside the other existing TKO shareholders, who will own the remaining 41% upon completion of the transaction.

The transaction is also subject to purchase price adjustments to be settled in cash and equity.

In addition to the acquisition news, the company also said that that its board of directors has authorized a share repurchase program of up to $2.0 billion of its Class A common stock and the initiation of a quarterly cash dividend program pursuant to which holders of TKO’s Class A common stock will receive their pro rata share of $75.0 million in quarterly distributions to be made by TKO Operating Company, LLC.