As the auction for the global sports powerhouse IMG draws to a close, the Los Angeles-based talent agency William Morris Endeavor appears poised to submit the highest bid.
Offers for the company are due Friday from three bidders, and a decision could come as early as Saturday.
Backed by Silver Lake, its private equity investor of less than two years, William Morris plans to offer more than $2 billion for the sports agency, according to people briefed on the matter who spoke on the condition of anonymity because they were not authorized to comment publicly.
Peter Chernin, a former News Corporation executive who now runs a media investment firm, has joined the European fund CVC Capital and other investors in a bid for less than $2 billion, according to people briefed on the matter who spoke on the condition of anonymity because details of the auction were private. ICM, another Los Angeles-based talent agency working with the private equity firm Carlyle Group, will most likely also bid less than $2 billion.
Representatives for IMG and its parent company, Forstmann Little, declined to comment. Representatives for Mr. Chernin, Carlyle and Silver Lake also declined to comment.
Mr. Chernin, as a former top executive at News Corporation, has experience in the sports industry having overseen Fox Sports. A deal with IMG could create synergies with the two Los Angeles-based talent agencies, which each have ties to film, television and other media. For Silver Lake, IMG could also be an attractive way to diversify William Morris’s business should it ever wish to take the agency public.
The private equity firm Forstmann Little acquired IMG for $750 million in 2004, and the company has transformed it from a talent agency to a diversified international operation that includes sports event production, licensing, fashion and other businesses. IMG handles retailing and licensing for the All England Lawn Tennis Club, which organizes the Wimbledon tennis tournament.
Although IMG handles top-tier athletes and entertainers including Peyton Manning and Justin Timberlake, its representation activities now account for less than 10 percent of its cash flow, according to people close to the company.
The company had been projecting earnings before interest, taxes, depreciation and amortization, or Ebitda, of $200 million for 2013, but IMG and Forstmann Little have more recently brought that figure down closer to $180 million. The company has a robust college sports business, which sells merchandise for 200 sports properties across the country and represents the multimedia rights for nearly 100 colleges and universities. But its sale of national sponsorships has lagged somewhat in recent months, according to a person close to the agency’s activities.
Mark McCormack and the golf legend Arnold Palmer famously started IMG through a handshake deal in 1960. IMG has for years been the subject of sale speculation, ignited by Mr. McCormack’s death in 2003 and fueled by the death of Ted Forstmann, Forstmann Little’s founder, in 2011.
IMG began prepping for a sale at the end of 2012, hiring Morgan Stanley and Evercore earlier this year to market the company. The two banks reached out to an unusually large pool of potential buyers, which at one point included the talent agency Creative Artists Agency and the real estate investment firm Colony Capital.
