Oaktree Capital Management and Centerbridge Partners LP will acquire Billabong International Ltd. in a recapitalization deal valued at about $400 million.
The two US private equity firms beat out Altamont Capital Partners after all-night negotiations with Billabong’s board and its advisers, Goldman Sachs Group Inc.
Oaktree and Centerbridge will lend $386 million to Billabong, which lost $859.5 million in the 12 months to June 30 this year.
A $135 million share placement to Oaktree and Centerbridge at 41 cents a share will follow the loan. Existing Billabong shareholders will be able to subscribe to a $50 million rights issue at 28 cents a share. The proceeds of the two share sales, $185 million, will be used to repay the $386 million loan.
Later, Oaktree and Centerbridge will have an option to take a stake of between 34 per cent and 41 per cent in Billabong at 50 cents a share.
Neil Fiske, a former Boston Consulting Group executive who turned around American sportswear and outdoor company Eddie Bauer, has been appointed Billabong’s new chief executive. He is expected to start work within days.
Yesterday shares in Billabong, which declined to comment, closed at 45 cents. The stock has climbed 190 per cent in three months, the best performance by a share on the S&P/ASX200 Index, according to Bloomberg data.
Chris Wyke of Moelis & Co. and Dominic Emmett of Gilbert Tobin advised Oaktree and Centerbridge.