This article was published on Aug. 13, 2025, at 3:24 p.m. on the ChosunBiz MoneyMove site.
As the preliminary bidding for the sale of global golf company TaylorMade is scheduled for the end of this month, strategic investors (SI) and financial investors (FI) from major countries including the United States, Japan, China, and India are reportedly expressing interest. Although the actual competition rate for the preliminary bid remains uncertain, industry analysts suggest that the sale price is likely to be above 5 trillion won.
As the sale price increases, the calculations of the existing SI, fashion company F&F, inevitably become more complex. They need to raise additional funds since they must present the same conditions as the highest bidder to exercise their preemptive right.
If TaylorMade is sold for 5 trillion won, F&F is estimated to need to secure additional funds in the range of 1 trillion won. The industry believes that brokerage firms that propose acquisition financing to F&F will likely support them with a package of measures such as capital increases or issuing new capital securities. However, this process might not be smooth due to recent challenges faced in fundraising, especially related to shareholder loyalty obligations.
◇ The preemptive right can be exercised only if the same conditions are proposed within 14 days.
According to investment banking (IB) sources on the 13th, JP Morgan and Jefferies, the lead company for the sale of TaylorMade, are expected to receive letters of intent (LOI) from bidders by the end of this month.
As a global brand, and given that the selling side hopes for a sale price approaching 5 trillion won, it is reported that various SI and FI from countries such as the United States, Japan, China, and India are considering participating in this acquisition battle. It is said that an SI with a market capitalization exceeding 100 trillion won is also included.
However, it has been confirmed that L Catterton, a private equity fund management firm affiliated with LVMH, will not participate. European FIs are reportedly not very interested overall.
An IB industry source noted, "I understand that there are dozens of potential bidders who have signed non-disclosure agreements (NDA) with the selling side, and there is a consensus that bids must exceed 5 trillion won to secure the winning bid."
If the sale price exceeds 5 trillion won, the likelihood of F&F exercising its preemptive right and acquiring control of TaylorMade will inevitably decrease. F&F signed an advisory contract with global investment bank Goldman Sachs on the 21st for exercising its preemptive right. If another bidder proposes to acquire TaylorMade, F&F has the right to first acquire the management rights under the same conditions within 14 days. They must also secure funding commitments by the deadline.
Assuming TaylorMade is sold for 5 trillion won, F&F can initially recover its investment as an existing investor and use those funds for the acquisition. After repaying 1.4 trillion won of acquisition financing from the 5 trillion won, F&F's share of the remaining 3.6 trillion won would be 1.3 trillion won.
If F&F uses the 1.3 trillion won it has recovered along with its cash reserves (300 to 400 billion won) to acquire TaylorMade for 5 trillion won, estimates indicate that even with a maximum of 2 trillion won in acquisition financing secured, it would still require over 1 trillion won more.
◇ Forming a consortium requires obtaining approval from Centroid... paid-in capital increases and exchanges might be challenging.
As a result, there have been consistent discussions in the market about F&F forming a consortium with another FI. It appears inevitable that they must join forces with other institutions to secure additional funds exceeding 1 trillion won.
According to IB sources, Goldman Sachs, which is advising F&F, has reportedly made offers to multiple potential bidders asking if they would form a consortium with F&F. It appears they persuaded potential bidders that participating in a consortium with F&F could position them as the preferred negotiator without competing in the bidding.
However, for F&F to acquire management rights by forming a consortium, they must obtain approval from the selling entity, Centroid Investment Partners. A Centroid official stated, "Suggesting to join hands with F&F, who holds the preemptive right, instead of entering the bidding could be seen as a form of bid interference or collusion." Typically, purchasers must seek prior approval from the seller to form a consortium.
Industry discussions also revolve around the possibility of institutions providing acquisition financing to F&F along with package proposals for paid-in capital increases, exchangeable bonds (EB), and new capital securities. In fact, it has been confirmed that senior officials from multiple major brokerages have contacted F&F to propose acquisition financing, engaging in behind-the-scenes competition, and that they may gain an advantage as an acquisition financing arranger by offering packages along with low interest rates.
An official from a securities firm commented, "In the case of F&F, with a market capitalization of about 2.4 trillion won, sourcing funds in the 100 billion won range through capital increases or equity-type securities might also be one strategy."
However, this funding approach also carries risks. Recently, the influence of minority shareholders and activist funds in the domestic capital market has increased, leading to repeated failures of large-scale fundraising efforts by listed companies. The attempt by Taekwang Industrial to issue exchangeable bonds based on its treasury shares is a representative case.
Under the amended commercial law from last month, the duty of care of directors has expanded from 'the company' to 'all shareholders,' complicating fundraising efforts utilizing publicly traded stocks. If there are concerns that F&F could harm financial stability or incur excessive liabilities by acquiring TaylorMade, it raises the likelihood of a backlash among shareholders.