Billabong considers takeover bid
Australian clothing company Billabong has said it has received a revised takeover proposal from US-based private equity firm TPG Capital for AUD$3 cash per share. The board will consider the proposal, but urged its shareholders not to take any action. The offer reportedly values the company at AUD$765.3 million (US$818.1 million).
The apparel company noted that the non-binding indicative proposal is subject to due diligence, subject to finance and conditional on a number of other matters.
On 17 February, 2012, Billabong entered into definitive agreements with Trilantic Capital Partners to establish a joint venture to accelerate the growth of the watch brand Nixon, which was acquired in 2006. Billabong and Trilantic will each hold approximately 48.5% of Nixon, and Nixon management will purchase the remaining 3% stake. All the proceeds will be used to write down debt, Billabing said, after reporting first half net profits to December 31 were down 71.8% to AUS$16.1 million (US$17.4 million).
Billabing said it would cut 400 jobs worldwide and shut down up to 150 stores to help repair its debt-laden balance sheet.
The group wants to reduce rent expenses and said it would close between 100 and 150 loss-making and underperforming stores worldwide. It has 677 stores globally.
