MBK Partners rebuffs Golfzon over golf course sale, calls process 'lawful and principled'

Private equity fund manager MBK Partners has directly rebuffed claims raised by Golfzon Holdings over the sale of Golfzon County, saying the process followed "lawful procedures in line with the contract and capital market principles."

MBK Partners issued an official statement Thursday pushing back against positions Golfzon Holdings stated Wednesday regarding management rights guarantees and the sale process, calling them "a distortion of the contract's essence and baseless claims that upend market common sense."

On the exercise of its drag-along rights, MBK Partners said the management rights guarantee "was a conditional structure premised on a successful initial public offering." When MBK invested in 2018, the agreement explicitly included a drag-along clause allowing MBK to bundle Golfzon Holdings' stake and sell management control to a third party if a listing failed, and Golfzon Holdings acknowledged and voluntarily signed the agreement, MBK said. Characterizing the exercise of drag-along rights as "unilateral" after the listing fell through amounts to a repudiation of the contract itself, MBK added.

MBK Partners also drew a line against Golfzon Holdings' claim that the financial investor should have led the IPO process, calling it "putting the cart before the horse." Under standard capital market practice, Golfzon Holdings — as the strategic investor in the portfolio company — bears the responsibility to diligently pursue a listing and support the financial investor's exit, MBK said, adding that Golfzon Holdings had not meaningfully advanced IPO efforts after the initial listing attempt collapsed.

MBK Partners also clarified its position on the right of first offer. The firm said it formally gave Golfzon Holdings the first opportunity to acquire the asset before launching an external sale process, but Golfzon Holdings declined to act on it, insisting instead on an IPO that was unworkable given regulations on dual listings. Golfzon Holdings only indicated a willingness to buy near the end of the competitive bidding process involving third parties, MBK said, adding that the final terms Golfzon Holdings offered — on both price and structure — were significantly inferior to those of the winning bidder, The Siena Group.

MBK Partners also criticized Golfzon Holdings' claim, raised immediately after losing the bidding, that lease agreements covering four golf courses were "unfair contracts." The firm called the claim "a textbook self-contradiction," saying the agreements were lawfully established by mutual consent at the time of the 2018 investment and had been maintained for years.

MBK Partners said it "will hold Golfzon Holdings strictly and firmly legally accountable for its groundless distortion of facts, market disruption, and breach of contract."

MBK Partners, which ran the sale process with Morgan Stanley and Samjong KPMG as advisers, signed a share purchase agreement Wednesday with a consortium of The Siena Group and CL Asset Management for management control of Golfzon County. Golfzon Holdings subsequently pushed back against the sale, claiming MBK had "unilaterally exercised drag-along rights to seize management control."