Billabong calls TPG takeover bid too low

Published:  27 Feb at 6 PM

As reported by the BBC, Australian surf gear maker Billabong has declined a takeover bid from TPG Capital, saying it is still in talks with the investment group. TPG had offered 765 million Australian dollars (A$3 per share), which Billabong called too low.

Billabong has watched its fortunes shrink in recent years thanks to falling global demands. Its net revenue fell by 72% to A$16 million during the six months leading to the end of December 2011.

A strengthening Australian dollar has also affected its overseas sales, increasing the price of Billabong goods for foreign buyers. The Australian currency has soared over 11% against the American Dollar since October 2011.

Billabong shares have risen over 60% since the TPG bid, and went up another 2.4% at the Australia Securities Exchange on Monday after the company said it was still negotiating with TPG.
However, Billabong stated it was not yet known whether these talks would result in an improved bid from TPG. The firm’s shares have also been strengthened by an announcement of its restructuring plan, raising investors’ hopes of a strong recovery in its business.

Under the new plan, which was revealed after TPG presented its takeover bid, Billabong said it would auction off its Nixon brand and start paying off its debt using the proceeds.