TaylorMade-Adidas Golf Acquisition Of Ashworth Could Hit Snags

TaylorMade-adidas Golf yesterday announced a deal to acquire all of the outstanding shares of Ashworth for $26.5M in cash and the assumption of $46.3M in debt, but the deal "could face snags, including getting a majority of Ashworth's stockholders to go along with the price tag of $1.90 per share," according to Mike Freeman of the SAN DIEGO UNION-TRIBUNE. Ashworth traded "as high as $3.75 a share" two weeks ago, but it closed yesterday at $1.84. L.A.-based B. Riley & Co. analyst Ian Corydon said, "From the standpoint of shareholders, everyone has to be disappointed." But Knightspoint Partners of N.Y., Ashworth's largest shareholder at 16%, has "agreed to the price." Freeman notes "further complicating the deal is Ashworth's licensing agreement with Callaway Golf -- TaylorMade's arch rival" and Carlsbad, California, neighbor. Ashworth makes golf shirts "sold under the Callaway brand name." Ashworth "has suffered in past years from increased competition, as well as rampant executive turnover." And while it was a "small company," PGA Tour member Fred Couples and CBS announcer Jim Nantz "endorsed its products, which remain the best-selling brand at golf course pro shops." Ashworth employs "more than 500 people worldwide and operates 16 retail stores" (SAN DIEGO UNION-TRIBUNE, 10/14). At presstime, Ashworth shares were trading at $1.84, flat with yesterday's close (THE DAILY).