BILLABONG REJECTS TPG TAKEOVER
Written on the 27 February 2012
BILLABONG International today rejected a $3 per share take-over offer from US private equity giant TPG.
Gold Coast Business News understands the final decision rested with Billabong founder and majority shareholder Gordon Merchant.
It follows confirmation of a revised non-binding proposal today by TPG to acquire all shares in the company. The revised proposal was at the same price of $3 cash per share, but did not preclude the transaction with US watch brand Nixon announced on February 17.
The board, together with its advisers, has reviewed the TPG proposal in detail and concluded the proposed price did not reflect the fundamental value of the company in the context of a change of control.
Chief executive Derek O’Neill was unavailable for comment, but in a statement the company confirmed that its founder Merchant would not accept an offer of $3 per share for his shares and that the price is significantly below the underlying value of the company.
It is not known at this stage whether ongoing discussions will result in an improved proposal from TPG.
Billabong has ridden the highs and lows with shares once hovering at $16 per unit.
After dropping to $1.76 last week, they are now trading at a bit over $3.
Last week Billabong announced a capital restructure plan following a 70 per cent free-fall in half year profit and subsequently sold part of Nixon to pay down debt.