Billabong International Ltd. (BBG), Australia’s largest surfwear maker, received a takeover offer from VF Corp. (VFC:US), the maker of Lee jeans, and Altamont Capital Partners that matches a A$527 million ($556 million) bid from one of its directors.
The offer values the Gold Coast, Australia-based company at A$1.10 per share and is subject to due diligence, Billabong said in a regulatory statement. The board will spend six weeks evaluating the offer and a bid announced Dec. 19 from Paul Naude, the director of Billabong’s Americas division, who is backed by Sycamore Partners Management with debt financing from Bank of America Corp.’s Merrill Lynch & Co. unit.
Three private equity approaches for Billabong have already been rejected or scrapped over the past year. The company recorded its first annual loss since a 2000 listing in the year through June as it sold products at a loss to clear shelf space, paid penalties to break store leases early, and cut the value of its brands by A$343 million.
“They’ll be glad to get any offer they get, the company is in such disarray,” said Grant Saligari, a Melbourne-based analyst at Credit Suisse Group AG. The arrival of a second bidder may not create competitive tension to drive up the offer price as “you’ve already had a number of proposals go by the wayside,” he said.
Billabong announced Jan. 11 that it would appoint Peter Myers as its chief financial officer and restructure its business units, replacing long-time finance boss Craig White, whose departure was announced Dec. 20.
Shares closed today at 84.5 Australian cents, about 23 percent below the offer price being considered.
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