DISCLOSURE: Brandon Thurston is directly affiliated with POST Wrestling and co-hosts a weekly show with John Pollock on this site
An attempt by a journalist to unseal redacted information related to the ongoing shareholder lawsuit over WWE’s merger continues.
Brandon Thurston of this site and Wrestlenomics filed a notice of challenge in the Chancery Court of Delaware on December 9 regarding overly broad redactions in the filings related to the WWE merger suit.
At odds are specific information related to the bidders in the WWE sale process in 2023, which resulted in a merger with the UFC and the subsequent formation of TKO Group Holdings.
After Thurston’s challenge, KKR filed a public version of exhibits while applying redactions where they deemed necessary. KKR requested continued confidential treatment of certain references, notably the bid price and terms they offered nearly three years ago.
KKR and the Liberty Media group have been linked to the WWE sale process, which KKR has acknowledged in its deposition, but are withholding the ability for the public to uncover the terms and price attached to their bid. It argues that KKR will “experience particularized harm without continued confidential treatment of certain information contained within the confidential pleadings.”
KKR states that maintaining its confidentiality outweighs the public interest, adding, “third parties, whose interests aren’t presently before the Court, generally shouldn’t have their own confidential information jeopardized willy-nilly by the people in litigation.”
An opposition to this request was filed by Thurston and made public on Tuesday, where the reporter argues, “the information KKR seeks to seal goes to the heart of the underlying action: whether WWE’s board conducted a fair and competitive sale process. KKR has not demonstrated particularized harm sufficient to overcome the strong public interest in access.”
KKR also believes it will harm future scenarios where bidders are scared off if they believe their bid price will become public, “If the bid price, terms, and initial views of confidential bidders is bound to become public, it stands to reason that any potential bidder in a confidential bidding process may be less likely to submit a bid if it believes that it is unlikely to prevail or be moved to the next round”.
The opposition to KKR states that the entity has not explained why its bid from nearly three years ago is still sensitive due to “interest rates, market conditions, and a media rights landscape that have changed significantly” and that the court has previously supported the notion that the passage of time diminishes the competitive harm of disclosing such details.
In May 2023, after the announcement of the pending merger to form TKO, WWE filed an S-4 document with the SEC detailing the bid process and listing “Financial Sponsor 1” making a cash offer for $90 – $97.50 per share.
From the opposition filing submitted by Thurston:
Consistent with the S-4 and the KKR Motion, the public version of the Verified Class Action Complaint describes three offers to acquire WWE received by March 13, 2023. One is for a price [REDACTED], exactly the same as Financial Sponsor 1’s bid on the same date.
The S-4 at 87–88 goes on to state: “Strategic Party 1 and Financial Sponsor 1 subsequently engaged in further discussions from March 19, 2023, until April 1, 2023, regarding a potential joint bid, but ultimately did not provide WWE with a joint proposal.”
One of the central arguments by Thurston is that, beyond the bid price, the terms are relevant regarding whether KKR’s acquisition came with any caveats regarding Vince McMahon’s participation, or lack thereof, in the transfer. It highlights the terms of Endeavor’s offer, reducing its equity in the new ownership from 57 to 51 percent on the agreement that McMahon would be part of the new company and described his involvement as “critical to the value creation driving the deal.”
Thurston argues that Delaware law doesn’t treat bid prices as the sole component of value and that a chilling effect for future bidders to be dissuaded is “speculative and untethered to any evidence that disclosure here would affect KKR’s conduct or the conduct of bidders in comparable transactions.”
The WWE merger suit is being overseen by Judge Travis Laster in the Delaware Chancery Court and is scheduled for a trial in June. Defendants include Vince McMahon, Nick Khan, Paul Levesque, George Barrios, and Michelle Wilson. The plaintiffs represent multiple pension funds along with Dennis Palkon, a university professor.
