Billabong says buyout talks continue, despite share slump

Billabong suspended trading while it investigated the more than 20% drop in its share price, then announced that both consortia that have submitted indicative proposals remain in the process. As of early afternoon trading on Friday, its stock had risen about 6.50% for the day to A$0.74.

Sycamore Partners teamed up with Paul Naude, a Billabong director, to offer A$1.10 per share in cash - or A$527 million ($555 million) - for the company last December. Altamont Capital Partners subsequently matched this offer, with support from US apparel company VF Corp.

Billabong posted a net loss of A$275.6 million for the 2012 fiscal year, compared to a profit of A$119.1 million 12 months earlier. Adjusted EBITDA was down 40.9% to A$120.6 million.

The company projects an EBITDA of A$100-110 million for the 2013 fiscal year and wants the figure to reach at least A$210 million by 2016, largely based on a transformation strategy that will see the closure of less profitable outlets, a build-out of a global e-commerce platform, a renewed focus on core brands and the pursuit of supply chain efficiencies.

The most recent buyout offers are substantially lower than the A$694 million TPG Capital and Bain Capital were willing to pay in September. Both subsequently withdrew after conducting preliminary due diligence.

TPG originally submitted a bid of A$841 million in February only to be rebuffed. Billabong's stock then went into a downward spiral after a poorly received rights issue and deteriorating commercial performance.

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• Topics
• Buyouts
• Australasia
• Consumer
• Consumer
• Australia
• buyout
• Sycamore Partners
• Altamont Capital