BILLABONG BID MAY SAVE JOBS

Billabong shares may have tanked in the past two sessions, but many of the company’s staff have been buoyed by news that founder Gordon Merchant (pictured) has backed a takeover proposal from Paul Naude.

Naude, who was originally employed by Merchant in the 1990s and who later was to become the company’s US boss, has been given a 10-day exclusivity period by the Billabong board to firm up his bid.

Naude has teamed up with Sycamore Partners to make the bid which now values Billabong at just $287 million.

Over the next week, the partners will conduct an audit of Billabong’s figures ahead of launching a 60c-a-share non-binding offer for the surfwear giant.

Staff at Billabong have revealed to Gold Coast Business News that they are breathing a little easier now that Naude is in the box seat to make a takeover offer for the group.

Fears have been rife that Billabong’s Australian operations would be decimated under the alternative VF Corporation/Altmont proposal which at present has been sidelined in favour of the Naude proposal.

There were fears that a Billabong merger with VF Corporation, which owns a portfolio of apparel brands including Timberland, would have rendered much of Billabong’s Australian backroom operations superfluous.

“Staff had been concerned about job losses,” says one company insider who declines to be named.

“While we don’t have any guarantees that all jobs are safe under a Naude takeover, we see it as a better option. But we still won’t be comfortable until a deal has been done.”

Billabong founder Gordon Merchant has confirmed that, providing a better offer does not emerge, both he and co-director Collette Paull will take scrip in the new entity that will own Billabong.

Merchant and Naude control 16 per cent of Billabong and one of the key conditions of Naude’s bid is that at least 15 per cent of Billabong’s existing shares be rolled into the new entity.

Existing shareholders have been given the option of swapping their shares for up to 24.9 per cent of the new entity, or taking cash for their holding.

Either way, the bid process is still unlikely to be finalised until the end of May at the earliest.

Shareholders still have to approve the bid at an extraordinary meeting.

Billabong’s shares crashed more than 30 per cent to a new low of 51c on Wednesday after news of the Naude proposal was released to the market.

The shares finished around 54c today, still well short of the Naude bid.