Law firm Ademi LLP has initiated an investigation into the sale of World Wrestling Entertainment (WWE) to Endeavor for possible breaches of fiduciary duty and other violations of law.
The firm announced the investigation on Monday, following the announcement of the merger. According to Wrestling Inc, the investigation alleges that WWE stock is undervalued in the merger, and the transaction agreement restricts competing bids for WWE by imposing a significant penalty if WWE accepts a superior bid. The law firm is also investigating the conduct of WWE’s board of directors to determine if they are fulfilling their fiduciary duties to all shareholders and obtaining a fair and reasonable price for WWE.
On Monday morning, WWE and Endeavor announced that the company would merge with UFC to create a $21 billion sports and entertainment company, which will be folded into the Endeavor portfolio. Vince McMahon, the current chairman and CEO of WWE, will serve as the executive chairman of the new company, which remains unnamed at this time. It is not yet clear how the investigation initiated by Ademi LLP will affect the ongoing merger process between WWE and Endeavor.
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