World Wrestling Entertainment has reached an agreement with certain investors to give 6.9 million shares of newly issued common stock and $3.9 million in cash in exchange for $171 million principal amount of WWE’s 3.375% convertible debt due this year.
The move from WWE to alleviate its existing debt comes as Endeavor announced its deal last month to acquire the wrestling firm in a merger with UFC. Endeavor will control 51% of the newly formed public company, which is expected to be listed under the TKO stock ticker symbol. Existing investors in WWE will control 49% of the new company.
Based on Monday afternoon’s trading price of $107.32, the newly issued shares of WWE’s stock would be worth about $740.5 million. After WWE’s exchange of shares and cash closes as expected on or around May 18, the company will have $42.7 million principal remaining in outstanding convertible debt due this year. WWE’s stock price has increased 58% since January.
Earlier this month, WWE reported Q1 2023 net revenue of $297.6 million and operating income of $53.1 million — an 11% and 43% decrease year-over-year, respectively. WWE’s broadcast deals worth a combined $500 million with NBC Universal and Fox both expire next year, putting Endeavor in lucrative position to capitalize on new media rights deals.