Deutsche sees Silver Lake bid for Endeavor Group coming soon

Deutsche Bank lowered the firm’s price target on Endeavor Group (EDR) to $32 from $35 and keeps a Buy rating on the shares. The firm says the almost simultaneous announcements that Endeavor would pursue strategic alternatives and that Silver Lake would work toward a proposal to take Endeavor private are now four months old. The firm is inclined to believe an announcement of a bid from Silver Lake will come soon. The risk/reward of owning Endeavor is attractive as two potential short-term downside scenarios have a low probability, the analyst tells investors in a research note. Those scenarios are Silver Lake and Endeavor’s executive committee agreeing to a price below the current $24 stock price, or Silver Lake walking away, says Deutsche Bank. The firm thinks a premium to the current stock price is a more likely scenario given how low the current market implied valuation multiple is for Endeavor excluding TKO Group (TKO). It estimates a $30 per share bid for Endeavor’s publicly held shares would imply 9-times remaining company estimated 2024 EBITDA and would cost Silver Lake $7.4B.