UPDATE: Merger Proposal Could See Super Club Tee Off in Victoria

By Mathilda Andersson

One of the largest lifestyle and residential communities in Melbourne’s southeast, The Sandhurst Club, has formally proposed a merger offer to Rossdale Golf Club to secure long-term financial viability.

Located in the recently identified third most socio-economically advantaged suburb in Melbourne, the Sandhurst Club estate boasts two championship golf courses designed by Peter Thomson, state-of-the-art facilities, and 1332 premium residential lots.

The merger proposal, which has been under consideration by the Rossdale board since October 31, intends to amalgamate the management and operation of the two clubs into one super entity on Sandhurst’s current premises in the blue chip suburb.

The country-club-styled estate has cited dwindling membership numbers and an ageing membership profile to be behind the proposal.

Along with a recorded oversupply of courses in Victoria’s southeast, according to the document, these factors combined have led to a significant deterioration in financial viability for both entities.

“This offer…gives the two clubs the opportunity to address a very challenging environment in
a timely and professional transition,” the document stated.

“It will ensure an appropriate number of clubs remain in Melbourne’s south-east catchment, ensuring both clubs remain formidable through the effective use of its significant land resources to continue delivering premier golfing facilities rather than be lost or capitalised by other industries.

“Sandhurst is keen to boost usage of its two 18-hole courses and club facilities while providing a modern, broader offering and establishing a robust, viable club that will prosper through the inevitable change facing the golf industry.

“The merger would greatly benefit both clubs.”

In May earlier this year, the Leader could report on Sandhurst CEO Julian Murray’s financial concern for the club in an executive update to residents, revealing expected growth in golf membership and visitor use of the two championship golf courses had not occurred.

“The club is optimistic that necessary efficiencies can be acquired to achieve budget this year and next with minimal impact to member services,” he wrote.

“However, beyond this period unless substantial gains in golf course utilisation are achieved through either golf membership or visitor usage, hard decisions will be made that will inevitably impact golf member services.

“The club will continue to pursue aggressively all merger and acquisition opportunities to give Sandhurst the best probability for a robust and sustainable future.”

In that steadfast manner, the premium residential and golfing community reportedly approached Rossdale Golf Club in late August this year, but the offer failed to gain traction and a revised and more compelling version was submitted in late October again.

The new tender features generous financial support to the Rossdale course and facilities to remain open for the initial three years of proceedings (which could be extended another two years) estimated to an annual disbursement of $300,000-$500,000.

Additionally, the offers extends a complimentary ten-year membership subscriptions for all Rossdale voting members, and members at both clubs will enjoy all three 18-hole club golf courses prior to operations transfer to Sandhurst Boulevard.

Merger Update from Chairman Kevin Greaves

Further to my recent communication regarding the merger offer to Rossdale Golf Club (RGC), I can advise that Club Board representatives recently met with the RGC Board. The offer was discussed in detail, clarifications were made and some further offerings presented to facilitate a possible merger.

We have been advised by the RGC Board they have declined the offer and the extensions above. However, they have informed that this is not to say the offer will not be appropriate at a later date.

Consequently, the RGC Board were advised that the financial viability of a merger at a later date would need to be reassessed and that the current offer the Club had made would expire on 28 February 2017. The financial modelling completed by the Club to formalise the offer which was anticipated to be implemented prior to end of the current membership year (February) was based on the known facts at the time and any further offers would need to reassess this information and adjust the offer accordingly.

The Club Board and management will continue with a multi-pronged approach to achieve and maintain financial viability by pursuing any potential viable merger and/or amalgamation and members will be kept informed as and when factual information relating to any merger is known and can be released.
Regards,

Kevin Greaves
Chairman – Sandhurst Club