Landmark to sell bulk of real estate

January 02, 1991|By New York Times

NEW YORK -- The Landmark Land Co. has agreed to sell the bulk of its golf courses, resorts, and real estate assets for about $739 million to a joint venture led by its management and several Japanese investors, according to people close to the talks.

Landmark owns the Palm Beach Polo and Country Club in Florida, Kiawah Island in South Carolina, the La Quinta and PGA West golf courses and resorts in California, and other properties. All would be included.

If the agreement wins the necessary regulatory and stockholder approval, it will mark the end of an extensive worldwide marketing effort to sell some of the country's best-known golf courses and resorts in an effort to keep federal regulators from putting the company into receivership.

Landmark put its vast real estate portfolio up for sale early last year in an attempt to bring Oak Tree Savings Bank, a wholly owned Landmark subsidiary through which the real estate properties are held, in compliance with new capital requirements created by the savings and loan bailout legislation.

The two-stage agreement to sell the real estate and resorts will be a management-led buyout with the outside partners providing most of the money to take the company private.

The lead investor is the Daiichi Real Estate Co., of Tokyo, which will put together a consortium of investors including the senior management of Landmark, several Japanese investors, and some European investors. This purchase would be about 60 percent financed by Oak Tree. The golf courses, resorts, and the real estate operating companies that make up Landmark Land would operate under the aegis of Landmark International.

The first and more important stage of the deal is scheduled to close on or before March 31, but it remains unclear whether federal regulators will approve the plan or whether the regulators will conduct a lengthy review that extends beyond that date.

As part of the second stage, the consortium of investors would retain a six-month option to buy for about $92 million some additional parcels of land owned by the company.

Since spring, Landmark has retained the investment banking firm of Salomon Brothers to seek a buyer for its resorts and other real estate.

Landmark expects to record pretax gains of about $250 million from the first stage if it is completed, people at the company said. If the second phase is consummated, there would be additional pretax gains of about $35 million.

On Monday, Landmark announced that Oak Tree, which is incorporated in New Orleans, had given in to regulatory pressures to establish up to $224 million in loan reserves and write down certain of the savings unit's assets.

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