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Billabong still in talks with suitors despite share price drop

22 Mar 2013

surfing2_sqEmbattled Australian surfwear group Billabong told the markets that it is still in talks with two private equity suitors following a plunge in its share price to record lows on Thursday.

The company said, “Billabong confirms that the process for the change of control proposals previously announced is ongoing and that both of the consortia who have submitted indicative proposals remain in the process.”

Billabond is now investigating Thursday’s 20 per cent drop in its share price and has requested to halt trading in its shares on the Australian Securities Exchange (ASX) pending the release of an announcement.

In January San Francisco buyout house Altamont and North Face owner VF Corp partnered for an A$556m ($588m) bid for Billabong, matching a rival offer from the company’s US director Paul Naude and fellow US private equity firm Sycamore Partners.

Naude and Sycamore revealed their A$1.10 per share offer in December backed with debt financing from Bank of America Merrill Lynch – the same day Billabong issued its third profit warning in a year.

Back in February Billabong released yet another profit warning, saying it expected its full year EBITDA to fall between A$74m and A$85m compared to its previous guidance of A$85m to A$92m issued in December.

Earlier that month it was reported that the offers could be pulled following the due-diligence process amid concerns the company’s largest shareholder would refuse to sell up.

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