Wanda Sports Rejects PTO Offer for Ironman

Tri247.com has a post on todays announcement that Wanda Sports Group (WSG) have declined the Professional Triathletes Organization (PTO) approach to buy Ironman.

The response came in the form of a letter from Ironman CEO, Andrew Messick. Tri247 go on to speculate that the PTO have two other options, and one is the delivery of the “Ryder Cup of Triathlon” and potentially at Challenge Roth. One assumes for this to be significant they’d have to offer significant enough prize money, and money non-compete contracts to make it a real competition for say the top hundred long distance triathletes, fifty men, and fifty women.

I’d like to suggest an alternative theory though. A hostile takeover.

WSG is a public company. Ever since its ill fated, downsized IPO/launch, it’s share price has been on the decline. Interestingly their share price only took a small jump after the PTO approach, and soon settled back down on a slide. Sure, as of writing, the price was off exactly $1 from the launch price, but thats 1/5, a significant amount, especially with no apparent reason to rebound in sight.

The current share price values IRONMAN and Infront Sports Media etc. at effectively less than a USD/$ Billion.

That might seem like a lot, but in today’s billionaire playboy club world it most certainly isn’t. Adamo Chairman of the PTO is married to Emma Adamo, nee Mitchell, a family member of the historic and long standing British, Canadian and Irish business family. Family wealth is estimated at more than $20-billion, and the family control some 200 companies including Associated British Foods, Selfridges and more. Emma Adamo also sits on the board of the privately held Wittington Investments as are many family members . With North Point Advisors onboard through Jennifer Nimmo the PTO and Adamo have got the sort of financial planning and tax advice firepower the PTO would need for a hostile takeover.

As an aside, when I was an adviser to Richard Allen in the former PTU organization, we speculated about the future of Ironman, which had just been bought by Wanda in 2015. At the time, I was working on a Tech acquisition for Dell valued at approx. $2.4billion. In my entire tech career at IBM and Dell, I’ve worked on 10 acquisitions, in total valued at around $5billion.

HOSTILE TAKEOVER

WSG isn’t a primary candidate for a hostile takeover. But since it has a number of assets, assuming the PTO could raise the finance to take on enough shares, and then advance one of a few different ways to back WSG into a corner. Assuming WSG could be acquired, you’d then break-up the assets into one or more companies. At the extreme end of a hostile take-over, assuming you could get most of your acquisition cost back from selling off the non-Ironman assets, you could merge all, the Ironman races into the Challenge brand, run the Collins Cup as a Challenge event, with the final at the remaining Ironman race, Ironman Hawaii.

Of course there are loads of alternative scenarios, which would include making the Ironman regional Championship races, and run those as Collins Cup races, with Ironman Hawaii as the final, the remaining races would be shifted to Challenge. Equally, the PTO could just divest Ironman into a separate company which the retain a majority holding; divest the other WSG assets, and then just add a massive bump to the Pro prize money and add the Collins Cup as an overlay to select Challenge and Ironman races. Who knows?

You can hear Adamo on IMTALK Episode #580. You can skip forward to 45-minutes, and John and Bevin question Charles Adamo on the Collins Cup. It’s also here on their website.

It will be fun to hear what John and Bevan have to say on a future podcast.

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