The two US hedge funds that Billabong International snubbed in favour of a private equity firm for a debt-for-equity swap have launched a bid to block the rival deal with the Takeovers Panel.
Centerbridge Partners and Oaktree Capital are arguing that Billabong's refinancing dealwith Altamont Capital Partners is anti-competitive and coercive.
Yesterday, Billabong officially rejected a rival bid from the hedge funds - which hold most of its senior debt.
Reports said the rival proposal was reported as leaving the company with $100 million of debt compared to more than $300m and be much less dilutive for Billabong shareholders.
In a statement to the Australian Securities Exchange, Billabong said it had received a rival proposal from the funds after it had entered into agreement with Altamont.
Further, Billabong said the rival proposal was "subject to conditions, a number of which are incapable of satisfaction, and others which would make any refinancing far less certain than under the Altamont Consortium transactions".
The surfwear retailer and manufacturer said it had made "numerous requests" to the Centrebridge and Oaktreee consortium prior to securing a deal with Altamont, pushing for a refininancing proposal.
Under the Altamont deal, the private equity firm's two founding partners will join Billabong's board and it will take a stake of up to 40% of the group in exchange for $325 million in debt refinancing. Billabong's board has agreed to sell the bag and outerwear business, Dakine, to Altamont for $70 million (see Roger Montgomery's Billabong poised for a turnaround).