logo
Share SHARE
FONT-SIZE Plus   Neg

Billabong Rejects TPG's Takeover Offer - Update

Billabong Rejects TPG's Takeover Offer - Update

Australia's Billabong International Ltd. (BLLAF.PK,BBG.AX), which received a revised takeover proposal from U.S.-based private equity firm TPG Capital last week, rejected the offer Monday stating the price did not reflect the fundamental value of the company in the context of a change of control.

The revised proposal is at the same indicative price of A$3.00 cash per share as per TPG's earlier proposal, but did not preclude the Nixon deal.

On February 17, Billabong entered into definitive agreements with Trilantic Capital Partners to establish a joint venture to accelerate the growth of its Nixon watches and accessories brand globally. Billabong and Trilantic will each hold about 48.5 percent of Nixon and the management will purchase the remaining 3 percent stake. Nixon was valued at $464 million.

Billabong said its major shareholder Gordon Merchant, the founder of the surf-wear company, would not accept this price for his shares. Merchant believes the price is significantly below the underlying value of the company.

The company held discussions with TPG regarding the price to give the private equity firm opportunity to increase it further. The discussions are ongoing.

Billabong plunged to hard times as consumer spending declined in Australia close on the heels of the economic crisis in North America and debt-ridden Europe. The clothing company is resorting to asset sales and store closures.

"Regardless of the outcome of the discussions, the Board believes Billabong has an attractive independent future...the company is now on a much more secure footing and is well-positioned to grow and create value for shareholders should the retail sector and discretionary spending rebound from their current lows," Billabong said today.

Goldman Sachs is acting as financial advisor to Billabong while Allens Arthur Robinson is its legal advisor.

BBG.AX is currently rising 4.64 percent to A$3.0450 on a volume of 6.53 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
PayPal has agreed to buy Xoom, a digital money transfer provider, for $890 million in cash. Following the announcement, Xoom shares jumped 22 percent in after-hours trade on the Nasdaq. Discount retailer Family Dollar Stores Inc., which is being acquired by rival Dollar Tree Inc., said Wednesday after the markets closed that its third quarter profit fell slightly from last year, due mainly to a higher effective tax rate. The company's quarterly earnings per share, excluding items, also came in below analysts' expectations. Most of the major automakers, except General Motors Co. (GM), Wednesday reported improved sales results for June, as strong sales of trucks and SUVs continued to help offset weak car sales. Nonetheless, GM's June U.S. sales dropped 3 percent to 259,353 units from 267,461 units last year. The drop...
comments powered by Disqus
Follow RTT