Billabong dumped again

Surfwear giant Billabong is fresh out of suitors now private equity group TPG has withdrawn its takeover bid for troubled retailer.

Billabong, which recently saw another mystery suitor back out, received an indicative, non-binding and conditional proposal from TPG to acquire all of the shares in the company for $1.45 cash per share by way of a scheme of arrangement, in July.

A few days after the initial announcement (July 26, 2012), Billabong further advised that TPG would be granted the opportunity to conduct non-exclusive due diligence.

However, the company today confirmed that US-based firm TPG has now withdrawn its unsolicited proposal and discussions have ceased.

As a result, the formal process to evaluate change of control proposals that was announced on September 6, 2012 has concluded.

Going forward, Billabong chairman Ted Kunkel said the company will continue to implement its “Transformation Strategy” as reported previously on ragtrader.com.au, in August.

Billabong CEO Launa Inman also said the strategy will provide a clear pathway to unlocking the inherent value within the company.

“The board is pleased with the progress around implementation of the 'Transformation Strategy' and structural organisational change being driven by CEO Launa Inman,” Kunkel said.

“Acting in the best interests of shareholders has meant that we have remained focused on implementing the 'Transformation Strategy' throughout the formal process.”

The company today also reiterated its financial outlook as set out in the full year results presentation announced on August 27, 2012.

The company expects the current challenging retail trading conditions to continue during fiscal year 2013 and, assuming no further deterioration in these conditions, earnings before interest, taxes, depreciation, and amortization for fiscal 2013 is expected to be in the range of $100 to $110million in constant currency terms.

This compares to pro-forma fiscal 2012 earnings before interest, taxes, depreciation, and amortization of $84 million, excluding 100 per cent of Nixon and significant and exceptional items.

According to Billabong, the 2013 result will be driven by:

  • The benefits from the previously announced 'Strategic Capital Structure Review'

  • The additional benefits to be realised under the 'Transformation Strategy'

  • Recognition of Billabong’s share of after tax Nixon JV profits

Gold-Coast based brand Billabong International was founded in Queensland in 1973 and has since established and grown a portfolio of brands, including Billabong, RVCA, Element and DaKine.

 

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