Billabong: The centre of attention for two takeover bids.

Blood in the water

Surfwear retailer Billabong has attracted a second takeover bid for the company, hot on the heels of its latest offer from US private equity group TPG.

As previously reported on ragtrader.com.au, Billabong received an initial takeover bid from TPG in February this year, followed by another takeover proposal in July.

However, the company has today revealed that it has received yet another indicative, non-binding and conditional proposal from another party interested in acquiring all of the shares in the company.

The bid states a “cash consideration value of around $1.45" per share, to rival the TPG offer of about $695 million, which Billabong previously said undervalued the company.

As a result, the Billabong board has stated that it does not believe that the current proposal by the anonymous suitor “reflects the fundamental value of Billabong in the context of a change in control transaction”.

However, Billabong said the proposal for the moment is subject to due diligence and condition on a number of “other matters equivalent to those in the TPG proposal”.

A confidentiality agreement has been agreed, and as a result Billabong has also granted the party the opportunity to conduct non-exclusive due diligence. This is in order to reduce the conditionality of its proposal and to improve its understanding and valuation of the company and its assets.

Billabong said the process is expected to take several weeks, but would not comment further except to say that there is no guarantee that, following this process, a transaction will be agreed or that the board will recommend any proposal.

“The board does not intend to make any further announcements unless and until a recommended offer is secured, or unless there is a development which it considers requires disclosure.”

Billabong, established in 1973, currently owns Board Sports Retail Group and its retail businesses Surf Dive 'n' Ski, Jetty Surf, Surfection and Co-Op Surfection.

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