ClubCorp Sale

[Ponymon]

DMN reports that ClubCorp was sold to KSL Capital Partners, LLC. At the same time ClubCorp sold Pinhurst Resort in North Carolina to the family of ClubCorp founder Robert Dedman, Sr., who died in 2002. The two transactions are valued at $1.8 BILLION and are expected to close by year-end. I know that at one time SMU was flush with ClubCorp stock because that is the vehicle used by Dedman to gift his millions to SMU. It would be interesting to find out how much stock SMU owns of ClubCorp and how they have been able to monitize it since the stock is not publicly traded. If they still own a significant chunk of the stock it could have a HUGE impact on SMU's endowment. Anyone have any insight into this?

[smupony94]

I tried finding info but since they are not public someone on the inside will have to let us know

[rednblue]

Having worked in university development at diferent places, almost always a university sells any stock it receives immediately. The donor gets credit for the revenue from that transaction (average of the high and low that day). No university that I know of keeps a gifted stock since they have to give the donor some kind of monetary, tax-relieving credit.

At the same time, universities invest their endowments in the stock market, but that is a cash transaction. Whether they purchase a specific stock like ClubCorp is up to the investment fund. Most universities are cautious and lean toward safe mutual funds and very little hedge investing.

FWIW

[Ponymon]

Having worked in university development at diferent places, almost always a university sells any stock it receives immediately. The donor gets credit for the revenue from that transaction (average of the high and low that day). No university that I know of keeps a gifted stock since they have to give the donor some kind of monetary, tax-relieving credit.

At the same time, universities invest their endowments in the stock market, but that is a cash transaction. Whether they purchase a specific stock like ClubCorp is up to the investment fund. Most universities are cautious and lean toward safe mutual funds and very little hedge investing.

FWIW

Selling is easy to do with a publicly traded company stock, but not so easy when it is privately traded. I'm not sure, but would guess that there are restrictions on ClubCorp's stock's sale so that it couldn't be sold without the company's knowledge or permission to prevent it from falling into unfriendly hands. Probably their only avenue of sale would have been back to the company, but do not know if this ever happened. In 1999 I remember reading that Robert Dedman was considering a public sale to put a valuation on the stock for estate purposes. Either he decided against it at that time or was too late to the party as the market began to crater after the first quarter of 2000, but the deal never got done. SMU could have borrowed against the stock at a bank, but I would guess that the banker would have to have a buyback agreement from ClubCorp before making the loan. If SMU does still own a significant portion of the stock, the endowment will be greatly enhanced by this transaction.

[smupony94]

I took my nephew to Barton Creek Country Club for lunch today (we have Thanksgiving at night) and I finally noticed all the Dedman pictures and references through the place.