Billabong opens books

Surfwear giant Billabong has given US private equity group TPG a green light, following the company's recent takeover bid.

As previously reported on ragtrader.com.au, the embattled surfwear retailer confirmed it had received a second takeover offer from TPG for $695 million – below the firm's initial bid in February of $850 million.

However, Billabong has now confirmed it will grant TPG the opportunity to conduct non-exclusive due diligence, subject to negotiation of an acceptable confidentiality agreement.

In a company statement this morning Billabong said that the move would reduce the conditionality of the proposal and allow TPG to “improve its understanding and valuation of Billabong”.

However, Billabong also said that, “there is no guarantee that, following the due diligence process, a transaction will be agreed, or that the board will recommend an offer at the current proposed offer price.

“In fact, the board of Billabong does not believe that the proposal reflects the fundamental value of Billabong in the context of a change of control transaction.”

It is expected that the due diligence will take several weeks. However, the company is adamant that in any control transaction, it will seek to “ensure that the medium to long prospects of the company and its brands are reflected in the value realised by Billabong's shareholders”.

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