Rival US suitor runs eye over Billabong
Billabong waited until after the close of trading on Monday to report that a consortium involving US private equity firm Altamont Capital Partners and VF Corporation had lodged a bid to acquire all of its shares.
By offering $1.10 per share, the consortium has virtually matched a takeover offer lodged in December by a consortium led by Billabong board member and top executive Paul Naude.
Mr Naude, who is president of Billabong's American operations, teamed up with Bank of America Merrill Lynch and Sycamore Partners to offer $1.10 a share for Billabong, in what was the company's third takeover offer of 2012.
December's $1.10 offer was "indicative, non-binding and conditional", which may explain why the Billabong share price has remained below 90¢ in recent weeks and was 84.5¢ at Monday's close, down 1.5¢ on the day.
The new offer is also "indicative, non-binding and conditional", but brings the company into a bidding war, which could energise the stock in morning trading on Tuesday.
In a statement, Billabong said it would grant the VF consortium the same level of access to conduct due diligence that had been offered to Mr Naude's consortium.
"Billabong will now run a process to evaluate whether a change of control proposal, at a price and on terms that the board would recommend, can be secured. This process is expected to take approximately six weeks," the company said.
"The board of Billabong reiterates that there is no guarantee that an acceptable binding proposal will be forthcoming from either the Sycamore consortium or the Altamont/VF Consortium.
"In the meantime, Billabong shareholders do not need to take any action in relation to this matter."
If the new bidder were to prevail in the fight for Billabong, the famous Australian surf label would join a host of well-known fashion brands under the VF umbrella. VF owns more than 25 apparel brands including Lee, North Face, Wrangler, Timberland and Nautica.
Frequently Asked Questions about this Article…
A second bidder — an American consortium involving Altamont Capital Partners and VF Corporation (the makers of Lee Jeans) — has lodged a takeover bid for Billabong, matching a December offer of $1.10 per share and triggering a potential bidding war for the Australian surfwear company.
The two competing groups named in the article are: (1) a consortium led by Billabong board member Paul Naude, teamed with Bank of America Merrill Lynch and Sycamore Partners; and (2) an American consortium involving US private equity firm Altamont Capital Partners and VF Corporation.
Both consortia have put forward offers of $1.10 per share. Each offer is described as indicative, non-binding and conditional, meaning they are initial proposals subject to further due diligence and definitive terms.
The article notes the December $1.10 offer was indicative, non-binding and conditional, which likely left the market uncertain. As a result the Billabong share price stayed below 90 cents and was 84.5 cents at the close referenced in the story.
Billabong said it will grant the VF/Altamont consortium the same level of access to conduct due diligence that had been offered to Paul Naude’s consortium, so both bidders can evaluate the company on comparable terms.
Billabong said it will run a process to evaluate whether a change-of-control proposal that the board would recommend can be secured, and this process is expected to take approximately six weeks.
If the VF/Altamont consortium prevailed, Billabong would become part of VF Corporation’s portfolio of brands. VF owns more than 25 apparel brands, including Lee, The North Face, Wrangler, Timberland and Nautica.
No — the company’s statement says Billabong shareholders do not need to take any action in relation to this matter at present. Shareholders should monitor official announcements and the takeover process over the coming weeks.
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