William Morris nears deal for talent agency IMG -source

NEW YORK Tue Dec 17, 2013 7:22pm EST

NEW YORK Dec 17 (Reuters) - William Morris Endeavor Entertainment LLC (WME), the talent agency backed by private equity firm Silver Lake, is near a deal to acquire peer IMG Worldwide for around $2.3 billion, according to a person familiar with the matter.

An announcement on the sale of IMG could be made as early as Wednesday, the person said on Tuesday, adding that negotiations were still being finalized. The source asked not to be identified because the talks are confidential.

Spokespeople for IMG, WME and Silver Lake declined to comment.

IMG, whose clients include top tennis player Novak Djokovic and supermodel Gisele Bundchen and which owns the rights to numerous sports league, would be a significant boost to WME, which already represents some of Hollywood's biggest actors.

A consortium of talent agency ICM Partners Inc and private equity fund manager Carlyle Group LP were also finalists in the auction, as was buyout firm CVC Capital Partners Ltd, which had teamed up with Chernin Group LLC, people familiar with the matter told Reuters previously.

The sale of IMG is being driven by the trustee that runs the estate of Teddy Forstmann. His private equity firm, Forstmann Little & Co, acquired IMG for $750 million in 2004.

Forstmann Little has held onto IMG for longer than a typical investment period for private equity, and for years it has rebuffed overtures from prospective buyers. Buyout interest increased following Teddy Forstmann's departure in April 2011 as IMG chairman and CEO, and his death later that year.

Buyers that had approached Teddy Forstmann included former Yahoo CEO Terry Semel, who was willing to pay $1.5 billion in 2008. Sources told Reuters at the time that Teddy Forstmann wanted at least twice the amount.

Last month, advertising agency WPP Plc CEO Martin Sorrell described IMG as an asset he would love to own but said his company cannot afford it, as a frothy auction process pushed valuation towards the $2.5 billion mark.

However, bidders' assessments of IMG's valuation were revised downwards as the auction progressed and the company's earnings outlook was revised downwards.

Silver Lake acquired a minority stake in WME last year.

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