SYDNEY — Billabong International Ltd has rejected a third takeover offer from private equity group TPG Capital.
In a statement to the Australian Stock Exchange on Tuesday, Billabong said that its board had determined TPG’s revised share offer price of 3.30 Australian dollars, or $3.53 at current exchange, “still does not represent the fundamental value of the company in the context of a change of control” and that discussions between the two parties have now ceased.
The bid was TPG’s third offer in a fortnight, after making two previous offers of three Australian dollars a share, valuing the company at 765.30 million Australian dollars, or $818.03 million.
According to Tuesday’s statement founder, non-executive director and major shareholder Gordon Merchant and fellow non-executive director Colette Paul will not support any proposal by TPG Capital even at four Australian dollars a share or $4.28, which Merchant and Paul consider “would still represent a discount on the true value of Billabong shares”.
The company said it is still prepared to discuss other offers with TPG or other parties.
Billabong’s shares closed down 2.3 percent at 2.98 Australian dollars or $3.19 on Tuesday.
“The way that that letter reads, the price of [4 Australian dollars] wouldn’t be enough either. But I would think that a price significantly higher than [4 Australian dollars] would be too high for TPG. It’s difficult to predict,” said Deutsche Bank analyst Michael Simotas.
“These brands clearly have a lot of value and if we look at where the earnings were and where the share price was some time ago you could infer that that sort of figure wouldn’t be completely out of the question. But it’s obviously a lot higher than what’s on the table at the moment.”