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Talent agency Endeavor abandons IPO amid market pushback -source

Endeavor Group Holdings, an entertainment and talent agency company backed by Hollywood powerbroker Ari Emanuel, made a last-minute decision on Thursday to abandon its initial public offering, a person familiar with the matter said.

By Joshua Franklin

NEW YORK, Sept 26 (Reuters) - Endeavor Group Holdings EDR.N, an entertainment and talent agency company backed by Hollywood powerbroker Ari Emanuel, made a last-minute decision on Thursday to abandon its initial public offering, a person familiar with the matter said.

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

Endeavor pulled the $400 million IPO late on Thursday, hours before it was scheduled to price and one day before it was due to list on the New York Stock Exchange. It had lowered its indicated price range earlier in the day.

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, along with Chairman Patrick Whitesell and investor Silver Lake Partners, would have retained 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 UBER.N and Lyft Inc LYFT.O, 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 PTON.O slid as much as 7% in their market debut.

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

(Reporting by Joshua Franklin Editing by Rosalba O'Brien and Tom Brown)

((joshua.franklin@thomsonreuters.com; +1 646-223-6356; Reuters Messaging: joshua.franklin.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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