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Billy Walters, Goldman Sachs, and National Golf
As someone here reported (black lab?) a couple months back, Billy Walters had taken a stake in National Golf of about 10%. Some indications in the way Billy was ramping up his golf personnel, and the gross undervaluation of National Golf, led several to conjecture he was about to wet his feet as a corporate raider.
Well, before he could finish reading Mike Milken's book, looks like goldman Sachs has dropped a bomb, they just bid $12 a share.
Suggest Walters skip to chapters on golden parachutes, poison pills, and bidding wars.
Hey Billy, they're getting away for $365mil, looks to me like its worth closer to $460!!!
Goldman Sachs-Led Investor Group to Buy National Golf, American Golf
Monday September 16, 10:20 am ET
SANTA MONICA, Calif. -- An investor group led by Goldman Sachs Group Inc. (NYSE:GS - News) affiliates has agreed to buy National Golf Properties Inc. (NYSE:TEE - News) and its largest tenant, closely held American Golf Corp., for an estimated $360 million in cash and stock, plus more than $700 million in debt repayment and assumption of other liabilities.
National Golf is a real estate investment trust that owns 116 golf courses in 22 states. American Golf leases and operates nearly all of National Golf's properties. Both companies are based in Santa Monica, Calif.
The investor group is comprised of Goldman Sachs' GS Capital Partners 2000 L.P., Goldman Sachs' Whitehall Street Real Estate Fund 2001 and Starwood Capital Group's SOF VI U.S. Holdings LLC.
Under the transaction announced Monday, National Golf said its shareholders and common unit holders will receive $12 a share in cash or per unit, minus any dividends or distributions paid prior to the closing of the deal.
A person close to the situation on Monday said the deal includes about $250 million in cash and stock and $110 million in preferred shares. The investor group also is assuming an estimated $400 million in National Golf debt and $98 million in American Golf debt, as well as roughly $200 million in cash liabilities from the two companies, this person said.
Including debts and liabilities assumed by the investor group, the deal is valued at about $1.1 billion.
The acquisition, approved by the company's board and an independent committee, is expected to close in early 2003. It is subject to shareholder and regulatory approvals.
The offer represents a 12% premium to National Golf's Friday closing price of $10.70 on the New York Stock Exchange.
National Golf and American Golf will continue to own, lease or manage more than 250 municipal, daily fee, resort and private golf courses and clubs, primarily in the U.S. as well as in the United Kingdom, Australia and Japan.
David Price, founder of both American Golf and National Golf, will become chairman emeritus.
As a part of the deal, the investor group also will purchase the outstanding equity interests of American Golf and some of its affiliates. Mr. Price, along with other owners of American Golf and the related entities that are being acquired, will receive $10,000 in cash, 2% of the equity in National Golf and an option to acquire 2% of the equity in American Golf.
National Golf said this deal replaces "all of the consideration that these shareholders" would have received in the proposed merger with National Golf, including the series C convertible preferred stock that would have been convertible for up to 10% of the combined company's equity.
The golf industry had fallen on tough times as it faced a glut of new golf courses that had sprung up in recent years, outpacing demand. The recession and events of Sept. 11 exacerbated the problems as golfers pulled back on both business and leisure travel.
In February, National Golf suspended its dividend, and later announced plans to acquire American Golf and abandon its status as a REIT. Pressure for a change in the relationship between the public and private companies mounted late last year after American Golf said it wouldn't be able to make its lease payments to National Golf. American Golf also defaulted on some debt, which triggered a technical default at National Golf.