Billabong halts trading, PE firms said to cut buyout offer

Billabong said in a regulatory filing that the trading halt was necessary so that it could continue negotiations with potential buyers. The company had expected due diligence to be completed by the end of March but now expects to recommence trading or make an announcement by Thursday.

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. According to The Wall Street Journal, both consortiums have reduced their bids after Billabong's share price plummeted to an all-time low of A$0.63 in March.

The stock last traded at A$0.73 and analysts told Reuters that they expect the final offers to be A$0.80-90.

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.

The most recent buyout offers are substantially lower than the A$694 million TPG Capital and Bain Capital were willing to pay in September 2012. Both subsequently withdrew after conducting preliminary due diligence.

TPG originally submitted a bid of A$841 million in February 2012 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
• Consumer
• Australasia
• buyout
• Consumer
• Australia
• Sycamore Partners
• Altamont Capital