Callaway, Blackstone Reportedly Considering Bid For Fortune Brands' Golf Biz
Blackstone Group is teaming up with Callaway Golf “for a possible bid for Fortune Brands Inc's golf business,” according to sources cited by Thomas & Davies of REUTERS. One source said that the deal “could be worth up to” $1B and that final bids for the auction “are due on May 9.” Fortune Brands last year announced plans “to sell or spin off its golf business,” which makes Titleist golf equipment and FootJoy shoes and gloves, and “spin off its home products business.” The golf unit “had revenue of $1.24 billion and operating income of about $80.2 million last year.” A source said that Fortune “may decide in the end to spin off the golf business -- instead of selling it outright -- unless the bid prices come in significantly higher than they did in the first round” (REUTERS, 4/28). Callaway on Thursday said that “sales in its 2011 first quarter were hurt by the disaster in Japan, flooding in Australia and severe weather that delayed the start of the golf season in South Korea.” The company said it sees "early signs" of recovery in Japan, where sales fell $16M, or 30%. Overall, Callaway “saw a profit of $10.1 million on sales of $286 million in its first quarter, which ended March 31, versus a year-ago profit of $17.6 million on sales of $303 million” (NCTIMES.com, 4/28).