Icahn, Hedge Funds Face Lawsuit Over Arbitrage Bets on Endeavor Buyout
Carl Icahn's firm and several other investors are facing a lawsuit in Delaware over alleged collusion to challenge Silver Lake’s $25 billion buyout of Endeavor Group Holdings Inc. The case claims the firms engaged in illegal merger arbitrage by seeking appraisal actions, aiming for higher payouts than the agreed-upon $27.50 per share. This is one of the largest such legal efforts ever seen in Delaware and highlights a growing trend among hedge funds to use appraisals as part of litigation strategies against mergers. Separately, Icahn Enterprises and a Swedish bank are leading a class-action suit alleging that Endeavor executives breached their fiduciary duties by pushing through an unfair deal. Silver Lake and Endeavor have asked the court to block these efforts, arguing they violate securities laws and turn appraisal rights into speculative investments rather than genuine redress for harmed shareholders. The case is part of broader tensions in corporate law following a Delaware reform that has revived interest in appraisal arbitrage among hedge funds.
Tickers: $IEP
Topics: Litigation M&A Private Equity Buyout Regulatory Action