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TPG Capital now sole remaining bidder for Billabong

20 Sep 2012

Billabong has revealed that one of two suitors to buy the beleaguered Australian surfwear brand has pulled out of takeover talks, leaving global buyout giant TPG Capital as its sole remaining bidder.

Bain Capital was earlier this month revealed as the unnamed bidder that tabled an A$694m ($711m) offer to take the company private, which matched TPG Capital’s existing bid.

The news follows TPG’s fresh bid for the company in July – less than a month after Billabong founder Gordon Merchant said he was open to another takeover bid after shunning TPG’s offer in February.

Merchant, who owns more than 15 per cent of the business, told the Australian Financial Review he was open to an offer of lower than A$4 per share, despite saying in February he would not accept an offer of less than that amount.

“I thought it was the right decision at the time . . . No one has lost more money than I have. I don’t have any set figure in my head, but I would consider [a lower offer than $4 a share],” he told AFR.

A structural review released in March revealed the business – which operates through a global network of 677 stores – plans to close between 100 and 150 loss-making and under-performing outlets to reduce rent expense and increase EBITDA, resulting in the loss of around 400 jobs.

Australian companies outside of the mining industry have recently struggled under the weight of a strong Australian dollar, high interest rates and cost-conscious consumers, attracting interest from private equity firms.

The news comes just days after Australian surfwear rival Rip Curl said it received unsolicited takeover approaches from several international companies.

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