The Australian Shareholders Association has "refused to bow to pressure" from Billabong and Founder & Dir Gordon Merchant over plans "to oust him from the board" over his role in the company's rejection of an A$842M ($861M) takeover offer, according to Blair Speedy of THE AUSTRALIAN. The ASA said last week that it would "vote against the re-election" of Merchant at the company's annual general meeting on Oct. 24, citing his rejection of a A$3.30 a share takeover offer from private equity group TPG in February. Merchant's lawyers and fellow Dir Colette Paull, who supported his decision to reject the February bid, wrote to the ASA "demanding they retract claims" that Merchant had effectively prevented the board from accepting an offer of A$3.30, noting the offer was "indicative, non-binding, incomplete and conditional." This was followed Monday by a letter from Billabong's lawyers, who are also "demanding changes to the wording of the ASA's shareholder advice" (THE AUSTRALIAN, 10/16).
CAUSE FOR CONCERN: In N.Y., Gillian Tan noted on the WALL STREET JOURNAL's Deal Journal Australia blog that Citi analyst Craig Woolford has "offered a couple of answers" for why TPG or Billabong are not disclosing what led to the lack of a takeover. Woolford said, "The fact TPG spent six weeks looking at the business and felt proceeding with a takeover was not worthwhile is a concern." The broker believes TPG was unable to gain comfort over the visibility for future earnings due to the "underlying health of the Billabong brand or the sales decline in Europe" (WSJ, 10/15).