Investor Persuasion by F&F... "TaylorMade, Not the Right Time for Sale"

F&F Announces Official Opposition to Sale in Letter
"TaylorMade Still Has Growth Potential"
Centroid to Hold Briefing This Month to Select Financial Advisor

F&F is in conflict with the private equity firm Centroid Investment (Centroid) over the sale of TaylorMade and has advised limited partners (LPs) not to agree to the sale. This is interpreted as a strategy to delay the sale until the fund’s maturity and gain control.

According to the investment banking (IB) industry on the 7th, F&F officially sent a letter to Centroid and other LPs at the end of February stating that selling TaylorMade at this point is not appropriate.

TaylorMade logo. Asia Economy DB

Through the letter, F&F emphasized that it is desirable to pursue investment recovery after fully implementing value enhancement strategies. They argued that selling TaylorMade at this time, amid global variables such as exchange rates and tariff issues, would make it difficult to receive a proper valuation of the company.

They also explained that TaylorMade has additional growth potential from a business perspective, citing the launch of a new apparel brand, ‘Sunday Red,’ in 2024 through collaboration with Tiger Woods. It is also reported that they conveyed the opinion that pursuing an exit through an initial public offering (IPO) afterward would be preferable.

An F&F official stated, “Centroid cannot proceed with the sale of TaylorMade without F&F’s prior written consent, yet they are pushing forward with selecting a sale advisor and aiming for a sale within this year,” adding, “So far, no information has been shared with F&F regarding this, which clearly constitutes a breach of contract.”

He continued, “F&F proposes reviewing exit plans at an appropriate time after TaylorMade’s corporate value is fully reflected by the maturity of the private equity fund (PEF), and officially requests an immediate halt to the current sale process.”

Within the industry, F&F’s move is seen as a strategy to delay the sale ahead of the fund’s maturity in hopes of gaining control. If the sale fails by the fund’s maturity in May 2027, Centroid will need F&F’s consent to extend the fund’s maturity.

However, it is doubtful that other LPs will accept F&F’s claims. There is no guarantee that global variables such as exchange rates and tariff issues raised by F&F will be resolved by the fund’s maturity, and given the already expected substantial investment returns, other LPs may prefer a quick sale.

Centroid acquired TaylorMade in 2021 at a corporate value of approximately KRW 2.1 trillion. F&F invested KRW 558 billion. Other major LPs include MG Saemaeul Geumgo, NongHyup Central Association Mutual Finance, and the National Credit Union Federation of Korea. Centroid expects TaylorMade’s corporate value to reach KRW 5 trillion.

An industry insider said, “Other LPs currently have no official stance, but there is some sentiment that no significant changes will occur even if the sale is delayed further,” adding, “It seems they will continue to observe the situation without taking sides.”

Meanwhile, Centroid plans to hold a briefing session this month to select a financial advisor. Among major IBs, JP Morgan, Morgan Stanley, Bank of America (BoA), and Jefferies have been selected as candidates. Consulting is being handled by Bain & Company, which advised during the previous acquisition process.