ANOTHER SHARK CIRCLES SURFWEAR GIANT BILLABONG

Written on the 20 September 2012

ANOTHER SHARK CIRCLES SURFWEAR GIANT BILLABONG

A SECOND private equity group has made an offer for Billabong (ASX: BBG), raising the prospect of a bidding war.

In a rare piece of recent good news for shareholders, the Gold Coast-listed company says the new offer is “around’’ the $1.45 per share proposed last month by equity group TPG.

The price is 9 cents above today’s trading price for Billabong shares, but analysts expect the entry of a new player could eventually result in an increased offer.

Both initial offers value the company at around $694 million, about $86 million more than its current market valuation.

Directors say neither offer reflects the true value of the company.
The new bidder is understood to be Bain Capital, according to media reports. The company claims to have $66 billion in investments including holdings in Warner Music Group, AMC Entertainment and Burger King.

Billabong has opened its books to TPG and the new bidder.

“The board of Billabong now considers that the interests of shareholders will be best served by a formal process to thoroughly evaluate whether a change of control offer, at a price and on terms that the board would recommend, can be secured,” says the company in a statement.

The board says there is no guarantee the company will accept either offer.

The company recently released a transformation strategy which CEO Launa Inman believes can unlock the inherent value in the company.

Billabong shares rose 7.5 per cent on the announcement to $1.365.

 

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