Billabong International Ltd. (BLLAF.PK, BBG.AX) said Tuesday that it received an indicative, non-binding and conditional proposal from U.S. private equity firm TPG International LLC to acquire the company for A$1.45 per share in cash. The deal is valued at about $712 million. Billabong shares are currently trading up nearly 22 percent.
Billabong is engaged in the wholesaling and retailing of surf, skate and snow apparel and accessories, and the licensing of the company's trademarks to specified regions of the world.
Earlier this year, the firm had rejected an offer from TPG after its Board considered the revised price of A$3.30 per share as still not reflecting the fundamental value of the company in the context of a change of control. However, the company has seen an erosion in stock price.
The latest offer represents a 32 percent premium to Billabong's share price of A$1.10 before the offer was made public. The offer price is based on available public information and could be refined after due diligence. It is conditioned on Billabong retaining its existing ownership interest in all its brands.
Also, the company's non-executive directors Gordon Merchant and Collette Paull can roll out their share holdings into the proposal of TPG. The deal also has unanimous board recommendation as another condition.
Further, TPG has advised that Billabong shareholders Colonial First State Investment and Perennial Value Management agreed to sell their stakes of about 12.5 percent of Billabong's issued capital.
BBG.AX is currently surging 21.82 percent at A$1.34.
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