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Is Topgolf Callaway Selling Its Golf Equipment Business? Rumors and Reactions

Topgolf Callaway (MODG) - ★★ - Ranked 69th in Q1 2024 Mid & Small Cap Rankings


Shares of Topgolf Callaway Brands Corp. (MODG) surged as much as 14% on Wednesday, seeing the biggest intraday gain since May 2022. The sudden rally was sparked by a report that the company is exploring a sale of its Callaway Golf equipment manufacturing arm.


According to South Korea's Chosun Daily, Callaway Golf could fetch a valuation close to $3 billion in a potential deal. The report, citing investment banking sources, stated that Topgolf Callaway's major shareholders plan to spin off the TopGolf driving range chain business while selling just the Callaway equipment brand.


This reported strategic move comes as the golf industry is facing headwinds after the pandemic-driven boom in popularity.


The Chosun Daily report says Topgolf Callaway's major shareholders have already selected a lead manager and are proceeding to market their stakes and management rights in Callaway Golf.


Callaway Golf merged with TopGolf Entertainment in a $2 billion deal that closed in March 2021, acquiring the remaining stake it didn't own in the tech-driven driving range business.

If substantiated, a spinoff and sale of the equipment business could potentially unlock value for Topgolf Callaway shareholders.


The market reaction suggests investors are enthusiastic about this reported strategic shift.


Topgolf Callaway has a ★★ star ranking in our Q1 2024 Mid/Small Cap Rankings with a price target of $15.





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