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SBD Global/December 18, 2012/Finance
Billabong Has $555M Takeover Offer From U.S. Division Boss
Published December 18, 2012
A LOW OFFER? In N.Y., Gillian Tan reported Commonwealth Bank of Australia analyst Jordan Rogers said that a "takeover proposal for Billabong International from a consortium including ex-director Naude and private equity firm Sycamore Partners looks low." The broker said that "a A$1.10-a-share offer represents an enterprise value to earnings before interest, tax, depreciation and amortisation, or EV/ebitda, multiple of 6.8 times fiscal '13 earnings." That is "well below comparable action sports transactions, which have been executed at multiples of around 12 times" (WALL STREET JOURNAL, 12/17). Also in N.Y., Tan reported the bid by Naude "follows a string of failed takeover offers for the Australian surfwear retailer." Billabong's "sales have fallen, fueling doubts about its brand's resonance with younger consumers." Billabong "has also been hit by weak consumer confidence around the world and a high Australian dollar that has weighed on revenue" (WSJ, 12/16).
SHAREHOLDERS WAIT: In Sydney, Elizabeth Knight noted Billabong shareholders "have been left in no-mans land -- devoid of information that would enable them to make a choice on whether to follow the market rumours that an offer of A$1.10 for their stock is real or not" (SYDNEY MORNING HERALD, 12/17).