Greg Roumeliotis and Lauren Hirsch of Reuters report that investors are pushing for ClubCorp to be broken up and that the company has formed a committee to carry out a review.
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.
How dare they try to transform their properties for a new generation!
Private equity firm KSL Capital bought ClubCorp for $1.8 billion in October 2006 before taking it public in 2013. The company operates more than 200 properties but it saddled with major debt issues.