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Tuesday, Mar 19, 2024
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Callaway Mulls Company Sale

Callaway Golf Co., the Carlsbad maker of clubs, announced it has received an unsolicited bid to acquire the public company from an undisclosed party.

Callaway made the announcement following a story in the

Los Angeles Times

that Callaway received an all-cash offer of $1.2 billion or $15 per share in May from Thomas H. Lee Partners and William Foley, an insurance executive. The Times story cited unidentified sources.

Callaway said it retained the investment banking firm of Lazard Ltd. to help it “explore a full range of strategic alternatives that could enhance shareholder value.”

Shares of Callaway rose 10.6 percent on June 23 on the New York Stock Exchange, closing at $15.55, a new high for the year. In the last 52 weeks, shares, traded under the symbol ELY, have ranged from $9.28 to $14.28.

The maker of its signature Big Bertha driver has been struggling in recent years, and for the first quarter, reported net income of $18.4 million on revenues of $300 million, compared with net income of $40.5 million on revenues of $363.8 million for the prior year’s first quarter.

In August, longtime Chief Executive Officer Ron Drapeau resigned. Chairman William Baker took over, but the company is still seeking a permanent CEO.

The Times story said Callaway’s board of directors is divided on whether to accept the offer, and that some are campaigning to oust Baker, and replace him with another director, Anthony Thornley, the president of Qualcomm Inc., who is scheduled to retire July 1.

Mike Allen

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