Surfwear giant Billabong says TPG Capital's revised $904 mn bid still too low

Struggling Australian surfwear giant Billabong International, yesterday said that private equity firm TPG Capital has raised its takeover offer by 10 per cent to $904 million, but the price is still too low.

Billabong said in a statement that the sweetened A$3.30 a share offer still did not reflect the value of the company and, "As a result, discussions between the two parties have ceased."

Texas-based TPG Capital, which has $48 billion of capital under management, had on 12 February made a preliminary offer of $3 per share or A$765 million ($820 million) to debt-laden Billabong. (See: TPG Capital tables $820-mn bid for Australian surfwear giant Billabong)

TPG Capital's latest revised offer values Billabong at A$841 million ($904 million). Billabong market capitalisation a year ago was around A$3.3 billion.

Billabong yesterday reiterated that Gordon Merchant, the company's founder and largest shareholder with a 14.8-per cent stake, said in a letter to the board he would not accept an offer from TPG even if it were A$4 per share, since that would still represent a discount to true value.

Billabong, based in Australia's Gold Coast, has debt of more than A$500 million, of which, A$484 million is due in 2013 and the remainder matures in 2014.