IMG bids came in Friday well below the $2.7 billion mark the sellers had hoped for. Three bids were submitted by the deadline, and they were believed to be around $2 billion.
Several sources familiar with the sale process were dismayed at what they viewed as accounting tricks that plumped up IMG’s coffers; they were dubious that earnings were declared at almost $200 million.
The sports/fashion agency and events business could go to either Ari Emanuel’s WME/Silver Lake partnership, which offers the synergy of already being in the agency game, or to rival Peter Chernin and CVC Capital. CVC Capital owns rights to Formula One auto racing events.
But not everyone is thinking this is close to an end.
“This could be a broken process,” said one party. “There are only a few bids, after all this time? That’s a bad place to be.”
Several suitors had pursued IMG, including KKR, New Mountain Capital and individuals such as Warner Music’s Len Blavatnik, among many others.
Meanwhile, it seems the bidders may want to put their heads together. The WME camp doesn’t think much of IMG’s college-sports business, preferring the fashion assets because they create content.
The Chernin-spearheaded bid, however, thinks the college-sports business is one of IMG’s most attractive assets.
A separate source tells On the Money that there’s a chance that there will be no winner.
Another complained about lawyer Mark MacDougall, a friend of the late private-equity legend Teddy Forstmann, who ran IMG.
MacDougall — of high-powered Washington, DC, firm Akin, Gump — had little knowledge of IMG’s business but is charged with getting the biggest number in order to help unwind the Forstmann, Little entity that owns IMG.
The sale process is being run by Evercore and Morgan Stanley.
One thing’s for sure: IMG CEO Mike Dolan will be out the door if one of the two bidders is a winner. Both are eyeing other talent to run the business.
Winning the bidding might be the easiest part of running IMG, however. The company has seen some big names exit in recent weeks, particularly the tennis greats Roger Federer and Rafael Nadal, who left in the fall.