PE-backed Billabong gets $150m buyout offer

Boardriders is willing to pay A$1.00 per share for all outstanding shares in Billabong, according to a filing. This represents a 28% premium to the November 30 closing price. The stock ended morning trading on December 4 at A$0.94.

Oaktree holds a 19% stake in Billabong and is one of the company’s two senior lenders. Oaktree and Centerbridge Partners supported a refinancing of Billabong in 2013, whereby they agreed to lend it up to $360 million over six years at a fixed rate of 11.9% and received new shares and options that gave them a combined equity interest of up to 40.8%.

The two investors had bought the majority of Billabong’s debt from a bank syndicate after the company booked a net loss of A$860 million for 2013 and cut the value of its namesake brand to zero. The Oaktree-Centerbridge deal replaced a refinancing arrangement that had been negotiated with Altamont Capital Partners.

Billabong’s cash flow position has strengthened since the restructuring, but the market conditions remain challenging. The company posted A$974.7 million in revenue for the year ended June 2017, down 8% year-on-year, while the net loss expanded from A$23.7 million to A$77.1 million.

Boardriders has faced similar challenges to its industry peer, having taken its US business – which accounted for one-third of revenue – into voluntary bankruptcy in 2015. The company’s European and Asia Pacific operations were not involved in this proceeding. Oaktree and Bank of America provided $175 million in debtor-in-possession financing and then Oaktree led a debt-for-equity swap.

The Billabong board has granted Boardriders due diligence access to enable the company to put forward a formal proposal.

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• Topics
• Consumer
• Buyouts
• Australasia
• Australia
• Oaktree Capital
• M&A