Japan Golf Tussle Ends as PGM Fails in Bid to Buy Accordia

PGM Holdings K.K., the Japanese golf course operator led by Arihiro Kanda, said its 42 billion yen ($468 million) bid to take over Accordia Golf Co. failed as it couldn’t obtain the minimum shares required.

PGM received offers from stakeholders for 174,580 shares, falling short of the target of 209,224 shares, or 20 percent, the Tokyo-based company said in a statement today. Shares of Accordia have gained more than 50 percent since PGM announced the hostile bid on Nov. 15.

Accordia sought support from investors to fend off the offer and hired Daiwa Securities Group Inc. as an adviser. While the bid’s failure will deny PGM the bigger scale it was seeking, the result may benefit Japan’s declining golf industry by ensuring competition between the biggest operators, said real estate consultant Daisuke Seki.

“It could be a good thing for Japanese golfers, employees and other stakeholders as the two companies are competing to offer better services,” said Seki, chief executive officer of Tokyo-based IB Research and Consulting Inc. “Golf courses can just be land or they can be income sources. It’s up to the operators.”

Shares of Accordia rose 2.3 percent to 83,000 yen at 2:31 p.m. in Tokyo, higher than the 81,000 yen that PGM offered to pay for 50.1 percent of the stock. PGM fell 0.9 percent to 67,900 yen.

SESC Request

PGM said today that an article published by an unidentified news organization yesterday, the deadline for the takeover bid, impeded the offer by increasing the share price of Accordia. It asked the Securities and Exchange Surveillance Commission to examine whether any actions leading to the publication of the story might have breached Japanese law, PGM said in a statement.

Bloomberg News reported yesterday that Accordia seeks to sell about 10 golf courses to raise 15 billion yen to fund share buybacks, according to two people with knowledge of the matter.

Accordia reiterated today that it opposed the takeover plan, saying in a statement that the price was too low and the method was hostile. It pledged to continue to maximize shareholder value.

Higher Dividend

Accordia more than tripled its planned full-year dividend last month to 5,500 yen. The company approached companies including Goldman Sachs Group Inc. and Orix Corp. as potential investors to attract a higher bid, people with knowledge of the matter said in December.

Goldman Sachs is the former owner of Accordia. The Wall Street firm formed the company in July 2003 to revive failed courses it bought after the collapse of Japan’s asset bubble. The U.S. bank raised 124 billion yen selling a stake in Accordia’s 2006 initial public offering.

PGM, formerly owned by Lone Star Funds, the U.S. buyout firm, did an IPO in 2005. President Kanda used to work at Goldman Sachs and Accordia and joined PGM in 2011. PGM hired Barclays Plc’s Japanese brokerage unit to advise it on the bid.

Golf club memberships have been declining in Japan as the population ages and companies cut entertainment expenses. The number of Japan’s golfers 15 years old and over fell to 9 million in 2011 from 17.8 million in 1991, PGM said in November.

PGM owns 122 golf courses and Accordia has 133, the companies said in separate statements this week.

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