Quiksilver has launched a takeover bid for Billabong.
The merger proposal values the deal at around $198 million.
The confidential, indicative and non-binding proposal is from Quiksilver parent company Boardriders.
Boardriders majority owner Oaktree Capital already has a 19% stake in Billabong.
The scheme of arrangement values Billabong shares at a six-month high of $1 each.
Billabong recorded a loss of $77 million in 2017 and a $24 million loss in 2016.
Billabong shares swelled to 78¢ on Thursday, after rumours of a takeover.
The stock was trading at 64¢ one month ago.