Lone Star sells distressed Japanese golf course asset PGM

Heiwa has offered a 30% premium on PGM's JPY39,850 Wednesday closing price, Reuters reported. However, the figure is a fraction of PGM's historical trading high of JPY301,000 a share, achieved in January 2006 just after Lone Star took the company public.

Following its acquisition, Heiwa is expected to launch a tender offer for the remaining shares it doesn't own, but will keep PGM as a listed company.

The transaction mirrors Goldman Sachs' sale of its remaining 44.7% stake in Accordia Golf, touted as Japan's largest golf course operator, earlier this year on the public market. A Goldman Sachs unit sold 470,587 shares in Accordia worth about JPY37 billion. Reports noted that Accordia's stock lost 60% of its value since Goldman Sachs floated the company in 2006, attributed to a decline in the number of Japanese golfers.

Both Lone Star and Goldman were said to have purchased a number of golf courses in Japan in the early 1990s after the country's asset bubble burst. Despite turnaround efforts, many of these ventures failed.

At the time of Goldman's selldown of Accordia, Bloomberg reported that golf memberships reached their peak in Japan amid the bullish 1980s market. They have declined in the two decades following, with at least 800 golf clubs declaring bankruptcy since 1991, according to Meiji Golf, which trades club memberships in Tokyo.

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• Topics
• North Asia
• Credit/Special Situations
• Exits
• Consumer
• Lone Star Funds
• Exit
• Japan
• Distressed
• Consumer