NH Investment & Securities "F&F, Future Value Increase if TaylorMade Management Rights Are Sold"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities stated on the 21st that regarding the rumors of F&F's sale of its stake in the US-based TaylorMade, it believes that when Centroid private equity fund (PE) moves to sell management rights, the exercise of preemptive rights and the potential for future value increase upon consolidation remain valid.

F&F participated as a strategic investor last year on the 30th in a private equity fund (PEF) established for the acquisition of the global golf brand TaylorMade. Looking at the TaylorMade special purpose company (SPC) structure, out of a total of KRW 2.0692 trillion, KRW 1 trillion is acquisition financing, KRW 463.3 billion is mezzanine financing through the private equity fund (PEF, Centroid No.7-1), and KRW 605.9 billion is subordinated equity investment through the PEF (Centroid No.7).

Among these, if F&F invests KRW 200 billion in mezzanine financing and KRW 300 billion in subordinated equity investment, its equity ratio will be 49.51%. Additionally, in September last year, F&F acquired additional shares in the TaylorMade acquisition private equity fund (PEF) from Yuanta Securities, expanding its initial equity ratio from 49.51% to 57.82%.

Regarding the report on the sale of TaylorMade shares in the US released the previous day, F&F announced that "there are currently no specific matters being pursued." Jeong Ji-yoon, a researcher at NH Investment & Securities, explained, "There may be misunderstandings about a simple share sale, but F&F's equity ratio in TaylorMade (57.82%) remains unchanged," adding, "The shares currently being discussed for sale are KRW 200 billion mezzanine financing through the PEF (Centroid No.7-1), which is a type of fund not linked to preemptive rights. Since these are redeemable preferred shares (RPS) that cannot be converted into common stock in the future, there is no risk of dilution of the company's equity."

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