The Week That Was, january 15, 2017

     It appears that ClubCorp’s top executives and board members have been listening to the shareholder complaints that were made public last year.
     The Dallas, Texas-based course owner and operator, the self-described “World Leader in Private Clubs,” has taken steps that could eventually lead to a sale. It’s “in the early stages of an auction process that has attracted the interest of potential buyers,” and it’s organized a committee that will study options that might “further enhance shareholder value.”
     Last April, Kerrisdale Capital Management drew attention to ClubCorp’s “billion-dollar debt burden,” its annual losses, the lack of membership growth at its “same-store” properties, and its weak profit margins, and the Street recommended that investors sell their shares in the company. A few months later, a disgruntled minority shareholder, FrontFour Capital Group LLC, demanded that ClubCorp maximize its value by selling all or at least some of its golf properties and to pursue “any and all strategic alternatives, including an outright sale of the company.”
     ClubCorp has come a long way since Bob Dedman ran it however he pleased. As a public company, it’s obligated to respond to pressures brought by shareholders whose only concern is maximizing the return on their investments. It may appear that Eric Affeldt and his closest associates are still making golf-related decisions, but in fact they’re now in the business of delivering value to investors. If they fail, they’ll be replaced.
     KSL Capital, a private equity firm, acquired ClubCorp for in 2006, reportedly for $1.8 billion, and took the company public in 2013. The company will probably be sold to another private-equity firm, but don’t overlook the possibility of an overseas group buying it. ClubCorp would be a very attractive target to a Chinese conglomerate looking to carve out a place in the U.S. golf market.

     A Japanese billionaire is intrigued by the possibilities for golf development in the Philippines.
     Late last year, Kazuo Okada, the chairman of Tokyo-based Universal Entertainment Corporation, opened the largest casino in the Philippines, the Okada Manila. Okada has made a fortune by manufacturing and selling slot and pachinko machines, arcade games, and video games – he has a net worth of $2.3 billion, according to Forbes – and he views the Okada Manila, which features a nearly 1,000-room hotel and a man-made beach, as the base of Philippine operations that will eventually include resorts with golf courses.
     Okada is planning to develop his future properties with Antonio “Tonyboy” Cojuangco, a partner in Okada Manila and a cousin of Benigno Aquino, Jr., the Philippines’ president.
     “Mr. Okada wants [a] total entertainment package for the whole family,” Cojuangco told the Manila Standard. “So, aside from [the] hotel and its features, he is also going to be developing resorts in islands, golf courses in the country.”
     Okada, who once held a major stake in Steve Wynn’s casino company, reportedly has a particular interest in two locations: Palawan, an island province, and Davao, in the southeastern part of Mindanao Island. Palawan may hold special appeal for him, for it’s said to be “every beach lover’s dream destination,” and last year Travel + Leisure named it “the best island in the world.”

     The original version of the preceding post first appeared in the August 2016 issue of the World Edition of the Golf Course Report.

     A former military-owned golf course in a nation known for human-rights abuses is being transformed into an international-standard layout that its new owners believe is “destined to become the ‘must-play’ course in Myanmar.”
     Dagon Golf Club, in Yangon, Myanmar, expects to complete its makeover this spring, and the people involved in giving it a fresh face have boldly raised expectations. Phil Ryan of Pacific Coast Design, the course’s architect, says the 18-hole track will “surely rank as one of the region’s best golf courses,” and Justin Strachan of Absolute Golf Services, the course’s operator, thinks it’ll “set new standards for golf” in a nation that’s become “the perfect location for a top-level course.”
     Jewellery Luck Group of Companies has set out to make Dagon the centerpiece of Dagon Golf City, a community that will feature villas, apartments, a hotel, and a retail/commercial area. The golf city is an example of the kind of growth Yangon has seen since nations around the world began lifting economic sanctions that were imposed to protest Myanmar’s corrupt and repressive military rule. Myanmar now has a fast-growing economy and a growing taste for Western luxuries, but it remains a violent nation with persistent ethnic unrest that doesn’t figure to end anytime soon.
     If Dagon lives up to its billing, it’ll vie for prominence with Yangon’s Pun Hlaing Golf Club, a venue with a tournament-worthy, Gary Player-designed course that Golf Digest currently ranks as Myanmar’s best.