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SBD Global/October 5, 2012/Finance

TPG Could Walk Away From Billabong Takeover; Billabong Shares Fall

Surfwear company Billabong "hosed down rumors that U.S. private equity fund TPG was ready to walk away from talks on a proposed A$694M ($710M) takeover after a heavy share sell-off slashed its market value by almost a quarter," according to Blair Speedy of THE AUSTRALIAN. However, more than six weeks after commencing due diligence scrutiny of Billabong's accounts, TPG "still has unresolved concerns that could scuttle the takeover." The announcement came after Billabong shares had plunged as much as A$0.3, or 23%, to a three-month low of A$1.01 as rumours of TPG's possible withdrawal circulated in the market. They were trading at A$1.07 when trading was halted, meaning A$150M "had been wiped off the market capitalization." While the source of the rumors was uncertain, analysts said that "the biggest beneficiary was TPG, with the share price fall demonstrating the company's fate if a deal cannot be agreed to" (THE AUSTRALIAN, 10/5).
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