TEN MORE DAYS, SAYS BILLABONG

Written on the 24 April 2013

TEN MORE DAYS, SAYS BILLABONG

A LONG-anticipated bid for Billabong has just become a little longer.

The embattled surfwear group has agreed to extend its exclusive negotiations with US boss Paul Naude for another two weeks, dashing hopes that a deal would be presented to the market today.

Naude, who has teamed up with private equity backer Sycamore Partners to assume control of the Gold Coast-based group, earlier this month was given a 10-day period of exclusivity during which the consortium would undertake an audit of company financials and present a non-binding takeover bid for Billabong.

That deadline ended on Tuesday.

Billabong says Naude and Sycamore had requested the extension for a further 10 business days.

“Billabong and the Sycamore consortium agree that both have been working constructively and with the utmost co-operation to progress the quality of earnings report and the potential transaction,” the company says in a statement to the Australian Securities Exchange.

The new deadline for an offer is May 8.

“There is no guarantee that the proposed transaction will proceed, and neither the consortium nor Billabong is under any obligation to proceed with the proposed transaction,” Billabong says.
Sycamore has indicated it is prepared to pay 60c a share for all of Billabong’s shares.

It is also willing to allow existing Billabong shareholders to swap their shares for an interest of up to 24.9 per cent in the new takeover entity.

Sycamore wants at least 15 per cent take-up of shares in the new entity by existing shareholders, which paves the way for company founder and major shareholder Gordon Merchant to jump aboard.
Merchant and co-director Collette Paul control 16 per cent of Billabong and have indicated they will accept the Sycamore bid should no better offer emerge.

The indicative offer from Sycamore values Billabong at just $287 million.

This is compares with the current market value of $230 million, with shares trading at record lows around 48c each.

The massive decline in fortunes for Billabong shareholders has seen the once dominant company relegated to fifth place among the Gold Coast’s top listed companies.

Check out the full list in the latest edition of Gold Coast Business News.


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