Callaway Golf Company has put a critical component in place in the effort to turn around the company’s fortunes that have been under pressure since the acquisition of Top-Flite two years ago. The ELY Board of Directors last week appointed George Fellows as president, CEO, and a director of the company. William Baker, who has served as interim CEO and chairman since August of last year 2004, will remain as a director, but has stepped down from both offices. Ronald Beard, the company's lead independent director, was elected to succeed Mr. Baker as chairman.

Mr. Fellows has been running a consulting business in New York since 2000, serving as a senior advisor to Investcorp and JPMorgan Partners. Prior to that time he served as president and CEO of Revlon, Inc. and currently serves on the Board of VF Corp.

The new CEO got right to work last week, moving to dispel media reports that the company would be sold. One report highlighted the fact that Fellows would be paid $7 million if the company was sold in his first year on the job, but he waved off any suggestions that the option was on the table.

“All of that conjecture in the press and everything else is fairly irrelevant really,” said Fellows in an interview with Reuters. “It is not our focus.”

He said the company is worth substantially more than the bids that valued the company at approximately $1.2 billion. He said the Board brought him in to turn around the business, not sell it. He told Reuters that the Board “wanted him to restore profitability and boost the company's stock, which is still down by about 40 percent from its highs of 2001.”

The LA Times has been the primary source of the stories involving a sale of the company, first reporting an unsolicited $1.2 billion buy-out offer from Thomas H. Lee Partners and William Foley II, chairman and CEO of insurance giant Fidelity National Financial. The paper further reported that the ELY board had formed a special committee to consider the offer from late May.

What has precipitated the comments by Mr. Fellows is a report last week in the Times that private equity firm Bain Capital and MacGregor Golf offered an all-cash bid of around $1.24 billion for Callaway Golf. MacGregor is owned by Parkside Group, a Bay Area investment firmed founded by McGregor CEO Barry Schneider. The Times said a person familiar with the matter confirmed the report. Parkside bought MacGregor in 1998 for more than $40 million.

The plan put forth by Bain and Parkside would apparently see Callaway folded into MacGregor. With MacGregor sales estimated at less than $80 million, the move could be a real stretch. Callaway sales were $935 million in 2004.