Truist notes that The Wall Street Journal reported that Leonard Green was in talks to acquire the Topgolf division of Topgolf Callaway (MODG) for $1B. This price compares to the Callaway Golf-defined valuation of Topgolf as of the October 2020 combination announcement of $1.986B for the implied equity value and $2.5B for the estimated EV. Timing for the deal is unclear per the article, suggesting “a deal could come together soon” or not at all. The firm is not that surprised Topgolf Callaway stock is up on today’s announcement in part given the challenged recent performance of Topgolf and uncertainty of a spin/sale timing following the Topgolf division CEO departure. Truist has a Buy rating on Topgolf Callaway with a price target of $12 on the shares.
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