Australian surfwear retailer Billabong International Ltd. (BLLAF, BLLAY,BBG.AX) said Monday that it has ended takeover talks with its two bidders, the Sycamore Consortium as well as the Altamont/VF consortium. Instead, the company is now in talks with both the consortiums for alternative refinancing and asset sale transactions.
Billabong will use the proceeds of these transactions to repay its existing syndicated debt facilities in full. The company added that it has not granted any period of exclusivity to either party with regards to a potential refinancing.
Ian Pollard, Chairman of Billabong said, "The refinancing is intended to provide the company with a comprehensive solution and an appropriate capital structure, allowing it to continue its reform agenda. Its our intention to conclude these discussions as soon as practically possible while aggressively reducing costs across all our global operations."
Billabong noted that the suspension of trading in its shares will be lifted immediately. On May 9, the company had requested that its stock be voluntarily suspended from trading, pending an announcement with regard to possible transactions, including in connection with the bid process announced by it on January 14.
Billabong said in mid-December that it received a confidential, indicative, non-binding and conditional proposal from Sycamore Consortium to buy the company for A$1.10 per share in cash. The consortium comprised Paul Naude, Sycamore Partners Management as cornerstone equity investor, and Bank of America Merrill Lynch as lead debt financier.
On January 14, Billabong said it received another indicative, non-binding and conditional proposal from a consortium comprising Altamont Capital Partners and U.S. clothing company VF Corp., to acquire all of its shares for A$1.10 per share in cash. The company later granted both the bidders the opportunity to conduct non-exclusive due diligence.
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 has resorted to asset sales and store closures.
Billabong had received two takeover offers previously, but in October last year, private equity firm TPG International LLC withdrew its takeover offer and ended talks. Another bidder had also withdrawn its takeover offer a month prior to that.
BLLAF closed Monday's trading at $0.55, up $0.01 or 2.80 percent on a volume of 15,200 shares.
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