AUSTRALIA: Billabong extends talks with Sycamore Partners
Billabong has extended exclusive talks with Sycamore Partners and former Americas boss Paul Naude to consider the potential sale of the Australian surfwear brand.
The two companies will continue talks for a AUD0.60 per share offer after Sycamore requested an extension to complete a report on the company's earnings. Billabong emphasised that there is no guarantee that the that the transaction will proceed.
"It is anticipated that the extension will be adequate for the completion of the report and its consideration," Billabong said in a filing to the Australian Stock Exchange.
Initially, Sycamore Partners and a consortium led by US apparel group VF Corp made competing offers of AUD1.1 per share early this year. After due diligence, Sycamore dropped its bid to AUD$0.60 per share and continued in exclusive talks with the company.
Under the proposal, which values the company at AUD$287m (US$300m), Billabong founder Gordon Merchant and former employee Collette Paull must exchange their combined shareholding of about 16% stock in a vehicle being set up for the take over.
In February, Billabong posted an AUD536.6m (US$554.3m) first-half loss, as sales fell 8.1% to AUD702m, driven by 17.3% drop in Europe.
Last year the company named former Target managing director Launa Inman as CEO, who then outlined a four-year transformation strategy. The plans include simplifying the business, leveraging Billabong and other key brands, realising the strategic potential of retail, expanding e-commerce and integrating the supply chain.
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