BILLABONG SHARES CRASH TO RECORD LOW

Written on the 4 April 2013

BILLABONG SHARES CRASH TO RECORD LOW

Billabong shares have slumped to a new all-time low as speculation mounted today that one of two rival bidders may be pulling out of the race for the surfwear giant.

Billabong has called for a trading halt on its shares to investigate the reasons behind the share-price freefall of more than 22 per cent in late morning trading.

More than 9.2 million Billabong shares changed hands as they hit a new record low of 63c.

The shares climbed back to 69.5c ahead of the trading halt which will remain in place until Monday at the latest.

The share price is now well south of both bids put forward to Billabong, which last month posted a record net loss of $536.6 million for the December half year.

One bid is from US clothing giant VF Corporation and Altamont Capital Partners, while the other is from Paul Naude, the long-time boss of Billabong’s American operations, in conjunction with private equity firm Sycamore Partners.

Naude and Sycamore have indicated they are willing to pay $526.8 million for Billabong, or $1.10 a share.

The VF/Altamont bid is pitched at the same price.

Market speculation has centred on VF Corporation possibly pulling out of the bid process, a rumour that has been gaining momentum in recent days.

But one market observer says it is possible that today’s share price slump is also the result of a trading anomaly.

Billabong has placed a March 28 deadline for the offers currently on the table when it was expected to make an announcement on the takeover proposals.

The surfwear company is likely to be now seeking assurances from both bidders that there has been no change in their positions as far as the current bids stand.

Billabong could not be contacted for comment.

The most recent low for Billabong’s shares was in November last year, when they edged below 74c just before the Naude offer first came to light.

The shares have traded higher since then, rising above $1 at times.


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