Saudi fund to take $400 million stake in Endeavor

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Saudi Arabia’s sovereign wealth fund is taking a $400 million stake in Endeavor, one of Hollywood’s biggest talent and event managers, as part of Crown Prince Mohammad bin Salman’s grand plan to diversify the kingdom’s oil-based economy, according to people with knowledge of the deal.

The purchase is the latest in a series of deals by the Public Investment Fund and is scheduled to close as soon as March 19, a day before Prince Mohammad and U.S. President Donald Trump meet at the White House, said the people, who asked not to be identified because some of the details are still private.

Then in early April, the crown prince – known by his initials MBS – will be the guest of honor at a Los Angeles dinner hosted by Endeavor Chief Executive Officer Ari Emanuel, the people said.

Endeavor, which stages events worldwide from New York Fashion Week to Ultimate Fighting Championship fights, could play a key role as Saudi Arabia rebuilds industries that have withered since movie theaters and other forms of cultural expression were banned more than 35 years ago. One proposal under discussion would have the company work with Saudi Arabia’s General Sports Authority and General Entertainment Authority on projects that range from staging events to training athletes, the people said.

The Public Investment Fund is buying into Endeavor on similar terms as Singapore’s GIC Pte and the Canada Pension Plan Investment Board, which invested last August. Two of the people said the fund would take a 7-percent stake in Endeavor, while another pegged it as a bit less.

In addition, Saudi Arabia will have a seat on Endeavor’s international advisory board for the entertainment, sports and fashion powerhouse. William Morris Endeavor Entertainment LLC was formed by the combination of William Morris and IMG.

Entertainment is one of the sectors MBS has made a priority as part of Vision 2030, his plan to wean the kingdom off its dependency on oil while, at the same time, relaxing some of the social restrictions that made it one of the world’s most conservative countries. In January, for the first time in decades, movies were screened in public theaters, with “The Emoji Movie” and “Captain Underpants: The First Epic Movie” playing in Jeddah.

The crown prince has been using investments by the PIF to build relationships with other companies he hopes will play a role in that economic and social transformation, including SoftBank Group Corp. and Blackstone Group LP.

In this latest deal, the PIF is being advised by Michael Klein & Co. and Endeavor is using Ares Holdings, the people said.