Australia's surfwear giant Billabong rejects $820-mn bid from TPG Capital

Australia's struggling surfwear giant Billabong International, yesterday rejected a A$765 million ($820 million) takeover offer from TPG Capital as too low, but said it was still talking with the US-based private equity firm.

TPG Capital has made a $3 per share preliminary and incomplete bid and Billabong said that the offer did not reflect the value of the company.

Gordon Merchant, Billabong's founder and largest shareholder holding a 14.8-per cent stake, has also rejected the offer as being significantly below underlying value.

But Billabong said in a statement that it has had "a number of discussions" with TPG Capital and the talks were continuing, ''it is not known at this stage whether those discussions will result in an improved proposal from TPG."
 
Texas-based TPG Capital, which has $48 billion of capital under management, had made the preliminary offer to debt-laden Billabong on 12 February. (See: TPG Capital tables $820-mn bid for Australian surfwear giant Billabong) 

Last week, Billabong had rebuffed the bid and announced a major restructuring that included job cuts and the partial sale of its watches and accessories company, Nixon Inc.

Under the new restructuring announced over the weekend, Billabong said it would close 100-150 loss-making and underperforming retail stores worldwide, most of which were set up two years back. The store closures will leads to 400 job cuts, with 80 of them in Australia.

In order to raise money to pay debts, Billabong will sell 48.5 per cent of its watches and accessories company Nixon to Trilantic Capital Partners for $A432.71 million ($464 million), while Billabong will retain 48.5-per cent and its management 3 per cent.