SYDNEY — Billabong International Ltd has rejected a takeover offer from private equity group TPG Capital that valued the company at 765.30 million Australian dollars, or $818.03 million, at current exchange.
In a statement delivered to the Australian Stock Exchange Monday morning, the Gold Coast, Australia-based company said TPG’s offer “does not reflect the fundamental value of the company in the context of a change of control.”
According to the statement, Billabong’s founder and major shareholder Gordon Merchant has advised that he would not accept an offer of three Australian dollars, or $3.21, per share because Merchant believes the price is “significantly below” the value of the company. Merchant owns 13 percent of Billabong International’s stock.
The three Australian dollar per share offer, made last week, was TPG Capital’s second takeover offer, after making an initial offer during the previous week at the same price.
The initial offer was contingent on Billabong not selling any brand assets. On Feb. 17, however, Billabong announced a deal to sell just over 51 percent of its top-performing Nixon brand to US equity firm, Trilantic Capital Partners and Nixon’s management, for $285 million.
Billabong International became a takeover target after its shares slumped, following a 72 percent drop in net profit for the six months ending Dec. 31 to 16.1 million Australian dollars, or $17.21 million.
Billabong reports that talks are ongoing with TPG Capital.
“Regardless of the outcome of the discussions, the Board believes Billabong has an attractive independent future,” the company said. “As a result of the strategic capital structure review, the company is now on a much more secure footing and is well-positioned to grow and create value for shareholders should the retail sector and discretionary spending rebound from their current lows.”