Apr 2, 2013
Billabong says still in talks with takeover suitors
Apr 2, 2013
Billabong has received offers from a consortium comprised of private equity firm Altamont Capital Partners and U.S. clothing group VF Corp and another group led by Billabong's former U.S. boss Paul Naude and private equity firm Sycamore Partners.
The two competing groups had made indicative matching offers of A$1.10 a share, valuing the company at A$527 million ($549 million), but analysts expect the final bids - which were due in last week - to be around A$0.80-90. That would be slightly above Billabong's close on Thursday of A$0.73.
The stock, which has lost around two-thirds of its value in the past year, sank to an all-time low of A$0.63 last month.
VF Corp, which owns brands including The North Face and Vans, only wants the Billabong namesake brand and plans to give Altamont the rest of the portfolio, which includes Von Zipper and Element.
Billabong said on Tuesday that "discussions in relation to these proposals remain incomplete." It requested a trading halt until Thursday, or until it is ready to make an announcement if earlier.
Since the two groups made their initial offers, Billabong has posted a first-half net loss of A$536.6 million and lowered its full-year guidance, citing difficult trading conditions in Europe and a disappointing performance from its Nixon watch brand.
The VF Corp and Naude offers are the fourth and fifth takeover approaches for the Australian company since February 2012.
Billabong had a tumultuous 2012, alienating investors after rejecting a A$3.30 per share bid by TPG Capital that February as too low. Subsequent offers of A$1.45 from TPG and Bain Capital were withdrawn after due diligence.
Billabong, which sponsors current world surfing champion Joel Parkinson, has sold off key assets and replaced its chief executive in the past year as a result of profit downgrades. It raised A$225 million in a deeply discounted rights issue to cut its debt, which currently totals about A$286 million.
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