Troubled Australian surfwear brand Billabong today (27 February) rejected an AUD765.3m (US$824.6m) takeover bid by private-equity firm TPG capital.

The company said that the AUD3 per share bid does not reflect the fundamental value of the company. It also said that its major shareholder, Gordon Merchant, would not accept an offer of AUD3 per share for his shares and that in "his view, the price is significantly below the underlying value of the company".

Billabong has advised TPG Capital of its position, and has had a number of discussions with the firm to give it the opportunity to increase its offer. The discussions remain ongoing, it said.

Billabong earlier this month said it would close between 100-150 under-performing shops as it booked a slump in first-half net profit. The company also announced the sale of a majority stake in Nixon in a deal that valued the accessories brand at US$464m.