Icahn, Hedge Funds Sued Over Arbitrage Bets on Endeavor Buyout

Icahn, Hedge Funds Sued Over Arbitrage Bets on Endeavor Buyout

Sabrina Willmer and Yiqin Shen

Mon, September 21, 2026 at 7:40 PM GMT+3 2 min read

• IEP -0.42%

(Bloomberg) -- Carl Icahn's firm and some other investors were accused Monday in a Delaware lawsuit of illegally colluding in arbitrage bets to challenge private equity firm Silver Lake's $25 billion buyout of Endeavor Group Holdings Inc.

Most Read from Bloomberg

Dozens of investment firms sought appraisal actions in Delaware Chancery Court in 2025, betting that a judge will award them more than the $27.50 per share Silver Lake paid for the sports and entertainment company. It's the biggest such appraisal effort ever in the state. Separately, Icahn Enterprises and a Swedish bank are leading a proposed class-action suit claiming executives breached their fiduciary duty in pushing through an unfair deal that hurt Endeavor's minority shareholders.

In a lawsuit filed Monday, Endeavor and Silver Lake asked a judge to prevent Icahn's firm from pursuing its merger arbitrage bet and accused it of concluding with other firms, including Pentwater Capital Management and Troluce Capital Advisors, "for the common purpose of pursuing a broad litigation offensive attacking the merger" in violation of securities and antitrust laws.

Jared Dubin, chief executive officer of Troluce, said his firm is reviewing the lawsuit. "Troluce intends to vigorously pursue its statutory rights in the state of Delaware" because it believes "the merger consideration offered wildly undervalues the assets," he said.

Representatives for Icahn Enterprises and Pentwater didn't immediately respond to requests for comment.

Silver Lake and Endeavor also asked the judge to prohibit dozens of investment firms from seeking appraisal on shares they purchased after the deal was announced, arguing that appraisal was meant only "as a safety net" for a single stockholder deprived of its right to block the merger and continue as an investor in the company. "Making litigation standing freely tradeable turns this court's rulings from a means of providing redress to genuinely harmed parties into an investment strategy," attorneys for Silver Lake and Endeavor wrote in the complaint.

Appraisal arbitrage involves buying a company's shares after a deal is announced and then asking a judge to award a higher price. The strategy has made a comeback following an overhaul to Delaware's corporate law last year.

Hedge funds have recently ramped up participation in both appraisals and proposed class-action lawsuits to challenge the terms of mergers and takeovers. 3G Capital's $9.4 billion buyout of Skechers USA is also facing appraisal and a lawsuit claiming breaches of fiduciary duty by directors.

The tension has now escalated to a new level with the Endeavor deal.

Endeavor argued that Icahn's firm purchase of shares after the deal announcement isn't "appropriately the subject of fiduciary-duty claims for activities that pre-dated their acquisition." The company said that if the court decided Delaware law allows "risk arbitrage," Icahn's firm should still be stopped from bringing litigation since its "claims are premised in violation of their disclosure and/or antitrust obligations."

Most Read from Bloomberg Businessweek

©2026 Bloomberg L.P.