September 26, 2019 / 5:17 PM / 8 months ago

CORRECTED-Media and events company Endeavor downsizes IPO amid market pushback

(Corrects spelling of Ari Emanuel in first paragraph)

By Joshua Franklin

NEW YORK, Sept 26 (Reuters) - Endeavor Group Holdings , an entertainment and talent agency company backed by Hollywood powerbroker Ari Emanuel, on Thursday lowered the target price range of its initial public offering (IPO) and said it planned to sell fewer shares than originally planned.

It is the latest black eye this month for the U.S. IPO market, on the heels of struggles for several high-profile offerings, such as SmileDirectClub and WeWork owner We Company.

Endeavor said in a regulatory filing it now is aiming to sell 15 million shares in the IPO at a price range between $26 and $27 per share, down from 19.35 million shares previously at a price range of $30-$32 per share. It did not give a reason for the change.

At the top end of the new target range, Endeavor would raise $405 million at a roughly $6.5 billion valuation.

Endeavor's businesses run the gamut from talent agency WME, which represents the likes of actor Dwayne Johnson, to mixed martial arts promotion company Ultimate Fighting Championship.

The company shares several characteristics with other IPOs that have struggled this year, such as a history of losses, a share structure giving top management operational control, and a heavy debt burden.

Endeavor's first-half net losses narrowed year-on-year to $192.6 million from $404.5 million. It reported a profit for full-year 2018 after losses in 2016 and 2017. In the first six months of 2019, revenue grew to $2.05 billion from $1.5 billion a year earlier.

Following a string of acquisitions in recent years, Endeavor's long-term debt at the end of June totaled $4.6 billion.

Emanuel, Chairman Patrick Whitesell and investor Silver Lake Partners will retain the vast majority of voting rights in the company after the IPO through a multi-class share structure.

Loss-making teeth alignment company SmileDirectClub has seen its shares tumble since its IPO earlier this month, while ride-hailing companies Uber Technologies and Lyft Inc , which have no stated timetable for becoming profitable, have also struggled since going public earlier this year.

On Thursday, having priced at the top of its target range, shares of fitness startup Peloton Interactive Inc slid as much as 7% in their market debut.

Endeavor shares are expected to begin trading on the New York Stock Exchange on Friday under the symbol "EDR."

Goldman Sachs, KKR, J.P. Morgan, and Morgan Stanley are among the underwriters on the IPO.

Reporting by Joshua Franklin, Editing by Rosalba O'Brien

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