The U.S. Bankruptcy Court in Wilmington, Delaware, has established a process and a timetable for the sale of substantially all the assets of The Top-Flite Golf Company. Pursuant to the official order approved by the court, Callaway Golf’s initial bid of $125 million will be the “stalking horse” bid under a process where other qualified bidders will have the opportunity to submit “higher and better” offers.
Under the court’s approved bidding process, parties interested in submitting a bid must become “qualified” and submit a bid not later than 27th August. Thus far, two parties, including adidas-Salomon AG, have been officially designated “qualified bidders,” and several others have indicated an interest in becoming qualified in addition to Callaway Golf.
Bids must, among other things, provide for an aggregate purchase price of at least $1.0 million over Callaway Golf’s bid; be on terms that are not materially more burdensome or conditional than Callaway Golf’s bid; and not be conditioned on obtaining financing or the outcome of any due diligence.
The break-up fee and expense reimbursement provisions initially proposed as a part of Callaway Golf’s bid have been eliminated, and any competing bid must also exclude any request for break-up fee or expense reimbursement. In addition, Top-Flite must determine that a bid submitted by a party other than Callaway Golf would likely be consummated if selected.
If one or more qualified bids are received by the deadline, then an auction will be held on 3rd September. Callaway Golf and any qualified bidder who actually submitted a qualified bid will be permitted to participate in the auction process on that day.
Top-Flite will select the best-qualified bid presented during the auction. If no qualified bid superior to Callaway Golf’s initial bid is received by the bid deadline, then Callaway Golf will be the selected bidder and the auction process will not occur.
On 4th September 4 Top-Flite will submit the best bid received during this process to the Bankruptcy Court for approval.
“We are pleased to complete this important step, permitting us to move closer to obtaining final approval of our bid for the assets of Top-Flite,” said Ron Drapeau, chairman, president and CEO of Callaway Golf. “Not only have we been selected as the lead bidder for Top-Flite in the Section 363 process, but we have also completed the antitrust review process required by the Hart-Scott-Rodino Premerger Notification Act – something that any other bidder would need to complete. We stand ready to close our transaction as soon after Bankruptcy Court approval as reasonably possible.”
The court rejected a request filed by adidas-Salomon AG to replace Callaway Golf as the “stalking horse” bidder in the bankruptcy process. That request had been filed after Callaway Golf and Top-Flite had announced their agreement. Adidas-Salomon is the parent company of Taylor Made Golf Company, Inc.
Callaway Golf Company www.callawaygolf.com
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