The WWE stock is down more than 1% in premarket trading due to reports of a $9 billion sale to UFC owner Endeavor.
Veteran analyst Steve Cahall of Wells Fargo says he doesn't expect a counter-bid.
We do not expect another bidder for WWE, as Endeavor seems like the most logical partner, given its acquisitive nature and similar complimentary assets, including strong knowledge of the media market for selling content rights and managing talent, Cahall wrote in a note to clients.
The advanced talks were reported on Sunday evening by Bloomberg. A source said to Yahoo Finance that Endeavor is in advanced talks to acquire WWE for around $9 billion. A deal could come as early as Monday and would unite two of the most well-known sports entertainment properties.
Enedeavor CEO Ari Emanuel would be expected to run the combined company as CEO while WWE's majority owner and executive chairman Vince McMahon would be expected to assume the executive chairman role.
As of Friday, WWE's market cap was $6.79 billon, making the estimated deal price a 32% premium.
The premium is solid, Cahall stated, and if McMahon is on board, it's done as WWE is a controlled company and McMahon would need a hefty premium for a cash deal. We would view a deal with Endeavor favorably for WWE. Cahall said that the combined entity would have to impress Wall Street with synergy potentials in order to win over investors.
EDR expects to have synergies with cost reduction or rights revenues by leveraging the combined scale in live sports entertainment, according to Cahall. Synergies and rights deals will likely be influenced by the 2025 -- 26 pro-forma NewCo EBITDA expectations. There is a chance of future risk to WWE shares if the outlook doesn't impress. Sozzi follows BrianSozzi on Twitter and LinkedIn. Email brian.sozzi yahoofinance.com