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SBD Global/September 7, 2012/Finance

Bain Capital Is 'Mystery' Bidder To Takeover Surfwear Retailer Billabong

Private equity firm Bain Capital is the "mystery bidder" behind a A$694.5M ($710.9M) takeover proposal for surfwear retailer Billabong, which matches an existing offer from fellow private equity firm TPG, according to THE AUSTRALIAN. Billabong "didn't identify a new bidder that has made a non-binding cash offer" worth around $1.45 a share, the same price offered by TPG in July. Bain's bid comes at a time when Billabong is trying to turn around a business that has "swung to a loss as customers desert its brands for rival makers of surf wear and ski apparel, and fragile consumer sentiment and a strong Australian dollar weigh on revenue." Taking the same stance as it did with the recent TPG bid, Billabong said that "it didn't believe the competing offer matched its fundamental value." The company added, however, that it would "grant the new party due diligence on a non-exclusive basis." Watermark Funds Management Senior Analyst Tom Richardson said that "competitive tension" in the bidding process would likely bring about "a higher price for shareholders" (THE AUSTRALIAN, 9/6).

NO GUARANTEES: In Sydney, Colin Kruger reported that Billabong shares were trading 10 cents higher at $1.37 after Bain's takeover proposal was announced. There is "no guarantee" a party will make a formal offer for the company after due diligence. If they do, it is not certain if they will match their $1.45 indicative bids. Billabong said, "The board does not intend to make any further announcements unless and until a recommended offer is secured, or unless there is a development which it considers requires disclosure." It said that the process is expected to take several weeks (SYDNEY MORNING HERALD, 9/6).
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Finance, Australia, Billabong

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