This article was published on Feb. 27, 2025, at 2:45 p.m. on the ChosunBiz MoneyMove site.
Fashion company F&F, which is at odds with Centroid Investment Partners (hereafter referred to as Centroid) over the sale of TaylorMade's management rights, has conveyed to its investors the intention to "not sell now but go public in the U.S. stock market (IPO)." Centroid has recently begun selecting underwriters for the sale of TaylorMade's management rights and has appointed a large legal team.
According to investment banking (IB) industry reports on the 27th, F&F sent an email to the LPs who participated in the acquisition of TaylorMade the previous day, expressing opposition to the sale of management rights and making this proposal. The company suggested that instead of selling immediately, they could exit (recover investments) through listing as the company is expected to grow more.
Centroid acquired TaylorMade in 2021 for a corporate value of about 2.1 trillion won. It raised 1 trillion won through senior acquisition financing, 463.3 billion won from the mezzanine in the project fund "Centroid No. 7-1," and another 605.9 billion won from subordinate equity (common stock) investments in another fund, "Centroid No. 7."
At that time, F&F invested 200 billion won in the mezzanine and 300 billion won in subordinate equity investment. This means they financed half of the acquisition price of about 1 trillion won, excluding liabilities. Major LPs besides F&F include MG Saemaul Geumgo, National Agricultural Cooperative Federation, and the National Credit Union Federation. Aside from F&F, the equity ratio of Saemaul Geumgo is extremely high.
Centroid has embarked on the sale of TaylorMade, expecting its corporate value to be around 5 trillion won. It plans to send a request for proposal (RFP) to select underwriters for the sale to global investment banks like JPMorgan, Morgan Stanley, and Bank of America (BofA).
F&F is opposing Centroid's attempt to sell TaylorMade. Since it possesses not only the preemptive purchase rights but also the "prior consent rights" regarding significant management matters, F&F's stance is that Centroid cannot sell the management rights to a third party without its opposition.
Some in the industry have pointed out that Centroid granting F&F prior consent rights regarding management through an implied contract could violate capital market laws. If Centroid were to face sanctions for violations of capital market law, discussions regarding the replacement of the general partner (GP) could arise. For a GP replacement, the consent of more than 67% of the LPs (based on equity percentage) is required.