Bids Expected for Fortune Brands’ Golf Unit

Initial bids are expected for Fortune Brands’ golf unit, with potential suitors including several private equity firms, as well as Adidas AG and Nike Inc., Reuters reported. Facing pressure from activist investor William Ackman, the company announced in December that it would split off its golf and home products units.

(Reuters) – Initial takeover offers for Fortune Brands’ (FO.N) golf unit are expected to be submitted today by a range of bidders, including Adidas AG (ADSGn.DE), Nike Inc (NKE.N) and private equity firms, sources familiar with the situation said on Friday.

Fortune Brands said in December it would split off its golf and home products units under pressure from activist investor William Ackman.

The golf unit is the first to receive bids, said the sources, who declined to be named because they were not authorized to speak to the media.

The unit, which makes Titleist golf balls and clubs, as well as FootJoy shoes and gloves, had revenue of $1.24 billion and operating income of about $80.2 million in 2010.

The golf unit had about $100 million in cash flow last year, which could give it a valuation of about $800 million to $1 billion, sources said.

Other bidders may include Roger Cleveland Golf Co, owned by SRI Sports (7825.T), as well as some private equity firms, one source said. More than two dozen potential bidders have looked at the business, but it was unclear how many would make first-round offers, the source said.

Fortune, Adidas, Nike and Roger Cleveland could not be immediately reached for comment. (Reporting by Jessica Hall; Editing by Steve Orlofsky)