TPG Capital becomes second PE firm to walk away from surfwear retailer Billabong

Private equity firm TPG Capital yesterday withdrew its A$694 million ($713 million) takeover bid for Australian surfwear retailer Billabong International Ltd, the second bidder to exit after conducting due diligence.

Neither TPG nor Billabong gave a reason for the withdrawal, but Billabong's CEO, Launa Inman yesterday said in a media conference call that she would go ahead with the restructuring plan announced in May.

Inman refused to comment on TGP's withdrawal, but analysts were surprised as to why the Texas-based private equity firm – a retail chain turnaround specialist - walked away from the deal after inspecting Billabong's books.

The withdrawal of the bid sent Billabong's share price tumbling by as much as 18.4 per cent in today early trade to 82 cents a share, a record low from the A$8.10 it was being traded less than two-and-a-half years ago.

Billabong first announced the bid in July after TPG had revised its bid downwards to a lower offer of $1.45-a-share or A$694 million, four months after the debt-laden surfwear company rejected TPG's  27 February offer of A$3.30 a share or $904 million.

Billabong's founder and largest shareholder Gordon Merchant, along with director Colette Paull, had said that they would consider selling for less than A$4 a share.