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SBD Global/January 15, 2013/Finance

Billabong Receives $555M Takeover Bid From U.S. Company VF Corp.

Australian surfwear company Billabong received a A$526.8M ($555.1M) "takeover offer from a group including U.S. clothing maker VF Corp., setting the stage for a bidding contest," according to Gavin Lower of the WALL STREET JOURNAL. Billabong said that the offer of A$1.10 a share from VF and Altamont Capital Partners "matched a bid from a group that includes private-equity firm Sycamore Partners, ex-Billabong Dir Paul Naude and the Bank of America Merrill Lynch unit of Bank of America Corp." VF said that "it was primarily interested in the Billabong brand as a means to continue the U.S. company's pursuit of action-sports properties." VF's brands include Nautica, Wrangler, Timberland and The North Face (WSJ, 1/14). In Sydney, Blair Speedy reported Billabong said that the VF consortium "would be granted access to its accounts to conduct due diligence." The company said, "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 noted that there was "no guarantee that an acceptable binding proposal would be forthcoming from either bidder, and advised shareholders to take no action." The offer "came after the market closed" Monday with Billabong shares sitting at 84.5c (THE AUSTRALIAN, 1/15). In N.Y., Cynthia Koons wrote on the WALL STREET JOURNAL's Deal Journal Australia blog Billabong's shareholders "have gotten their hopes up only to see bids fade in the past, but there is good reason to believe this time may be different." VF Corp. and Altamont Capital "are bidding after Billabong’s earnings downgrade is a sign they are not scared off by the headwinds facing the company" (WSJ, 1/14).
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