January 12, 2017 / 4:34 PM / 7 months ago

Golf operator ClubCorp exploring a sale

(Reuters) - ClubCorp Holdings Inc (MYCC.N), one of the largest owners and operators of private golf and country clubs in the United States, said on Thursday it was exploring strategic alternatives after Reuters reported the company was in a process to sell itself.

ClubCorp is in the early stages of an auction process that has attracted the interest of potential buyers that include private equity firms, people familiar with the matter said earlier on Thursday.

ClubCorp said it has formed a committee made up of independent board directors to carry out the review of its options.

KSL Capital, a private equity firm, bought ClubCorp for $1.8 billion in October 2006 and took it public in 2013.

The strategic board committee formed by ClubCorp has retained Jefferies LLC and Wells Fargo & Co (WFC.N) as advisers, the company said.

ClubCorp shares were trading up 13 percent at $17 in afternoon trading in New York on Thursday, giving the company a market capitalization of around $1.1 billion.

ClubCorp, founded in 1957, operates more than 200 properties, including golf and country clubs, business clubs and sports clubs across the U.S., Mexico and China.

It is a serial acquirer in the golf course industry, buying 12 new clubs in 2015 and 2016. It looks to buy locally-owned golf courses and then refurbish them by adding or improving amenities such as up-scale dining and event rooms.

Shareholder FrontFour Capital Group LLC in September published a letter highlighting ClubCorp's low trading multiple as compared with leisure industry peers such Six Flags Entertainment Corp (SIX.N). It questioned some of its business decisions such as ClubCorp's model to pour money into refurbishing its golf course acquisitions.

"It is obvious to us that ClubCorp's reinvention capital expenditures are transformative in nature and are in no shape or form 'maintenance,'" the letter wrote.

FrontFour also suggested ClubCorp, which owns the land for a large number of its properties, consider converting its real estate into a real estate investment trust (REIT). REIT structures help reduce the tax burden on rental income and can benefit shareholders through the significant distribution of profit as dividend.

(This version of the story corrects amount of ClubCorp owned by KSL in paragraph 4)

Reporting by Greg Roumeliotis and Lauren Hirsch in New York; Additional reporting by Carl O'Donnell in New York; Editing by Bernadette Baum, Alan Crosby and Bernard Orr

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