Wanda Sports Group is hoping to raise $1bn (€930m) if it chooses to sell its Ironman triathlon business, Bloomberg has reported.
In the wake of the news, Wanda Sports Group said that it was considering a sale of the unit.
Wanda Sports Group said that, “in response to recent media speculation and noting recent appreciation in the price of its American Depositary Shares, the Company confirmed today that it is engaging in preliminary discussions concerning a potential sale of The Ironman Group.”
It has been reported that Wanda has been working with an adviser, and has had discussions with interested private equity buyers.
The statement continued: “There can be no assurance that any agreement will be reached with respect to a transaction or that a transaction will be consummated. The Company further notes that it does not intend to comment further on this matter unless and until it deems further disclosure is required.”
Wanda, the China-based sports marketing company that is part of billionaire Wang Jianlin’s conglomerate, bought Ironman’s parent company World Triathlon Corporation in 2015 for $650m, plus the assumption of debt, from Providence Equity Partners.
Last week, Wanda snubbed a second approach to take over the business by the Professional Triathletes Organisation. The PTO is a body representing athletes that has secured funding from Crankstart Investments, a vehicle led by British venture capitalist and billionaire Michael Moritz.
Bloomberg reported that PTO was prepared to consider an all-cash transaction. The PTO has claimed that excessive leverage has hampered Wanda’s ability to invest in Ironman. Along with the Ironman business, the PTO is looking to enter into negotiations to acquire Wanda’s mass participation business as a whole.
On the latest approach from PTO, Wanda told SportBusiness last week: “Wanda Sports Group’s Board of Directors is committed to acting in the best interests of shareholders and regularly evaluates all opportunities to create value. The Ironman Group is successfully executing on its growth strategy as evidenced by its expanding athlete and fanbase and ability to add marquee events in key markets around the world.
“We have reviewed the Professional Triathletes Organisation’s vague and highly conditional letter, which is very similar to its first unsolicited letter. Based on the PTO’s lack of clarity and specifics, we are not prepared to engage in a discussion with PTO at this point.”
Wanda Sports shares on the New York Stock Exchange jumped in value by 17.4 per cent on Tuesday. The company’s share value has dropped by more than 60 per cent since its 2019 New York market debut. Bloomberg said the company’s current market value was about $409m.
Wanda Sports Group was left disappointed in the middle of last year as its debut on the Nasdaq stock exchange raised a total IPO of $190.4m, down sharply on initial targets. The Ironman business sits within the mass participation reporting segment at Wanda Sports Group. The mass participation unit generated €100.9m ($108.9m) in gross profit in 2018.
Wanda’s improved third-quarter revenues in 2019 were driven by the rise in the number of mass participation events – from 102 to 120 – and the 37.5-per-cent increase in the number of gross-paid athletes taking part. This came against the overall €31.2m third-quarter loss reported by WSG, chiefly due to variety of fiscal costs, including those related to the IPO.
Wanda’s WTC takeover came after its acquisition of the Infront agency and was followed by the purchase of Lagardère Sports’ endurance division as Wanda ramped up its activities in the mass participation space.