AUSTRALIA: Billabong warns on profit as $524m bid confirmed
Australian surfwear brand Billabong today (19 December) confirmed details of a AUD524m buyout bid - but shares fell 13.3% after the company issued another profit warning.
The takeover bid from board director Paul Naude, the former head of Billabong's Americas business who is teaming up with New York-based private equity firm Sycamore Partners, offers AUD1.10 a share. Bank of America Merrill Lynch is the lead debt financier in the deal.
It is the third offer the surfwear brand has received this year, and comes in well below the AUD3.30 per share offered by TPG Capital in February and subsequent offer of AUD1.45 per share in July that was then withdrawn.
Billabong said it will be "considering the proposal and its terms and will update the market as soon as possible."
The Gold Coast based company also lowered its full-year forecast for Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to the range of AUD85-$92m in constant currency terms.
Including $29m in "significant items" - which include a revaluation of its stake in SurfStitch, bid-related and restructuring costs - EBITDA is seen in the range of $56-$63m, the company said.
This compares with earlier guidance for EBITDA in the range of $100-110m, up on the $84m Billabong booked in 2012.
The downgrade is based on declining same-store sales at the West 49 retail business in Canada, softness in wholesale forward orders for Dakine and Element, and weaker results for South America.
And in Europe there has been a "significant increase" in cancellations of winter product orders, coupled with lower-than-expected gross margins and store sales.
Under CEO Launa Inman, who was appointed in May, Billabong has embarked on a three-year restructuring.
But the company's shares fell 13.3% today to AUD0.85 over fears that the earnings downgrade, as well as the conditions attached to the takeover bid, could lead to the collapse of the deal.
Australian surfwear brand Billabong has said takeover talks with two potential suitors have collapsed, as it lowered its full year profit forecast. ...
Australian surfwear brand Billabong is reportedly looking to sell its Canadian business as speculation mounts that a full takeover of the company is unilkely to proceed....
Kering-owned skatewear brand Volcom has appointed former Billabong executive Mandy Fry to the newly-created position as vice president of its women's division....
Australian surfwear brand Billabong has requested a voluntary suspension of trading in its shares so it can progress takeover discussions with interested parties....
Australian surfwear brand Billabong has placed its shares in another trading halt today (7 May) ahead of an update regarding the potential sale of the business....
Billabong has extended exclusive talks with Sycamore Partners and former Americas boss Paul Naude to consider the potential sale of the Australian surfwear brand. ...
Australian surfwear brand Billabong will enter ten days of exclusive talks with a consortium led by the former boss of the brand's America's division after the group cut its bid by 45% to AUD0.60 per ...
- 2014: Year in review - Sourcing winners and losers
- COMMENT: The decline of the buying office
- 2014: Year in review - Brand winners and losers
- 2014: Year in review - Retail winners and losers
- Bangladesh: Raising the bar on apparel exports?
- Report urges overhaul of Cambodia factory safety
- Bangladesh knitting worker killed by faulty lift
- Bangladesh factory improvements “will take years”
- North Face debuts locally-grown "backyard" hoodie
- Tommy Hilfiger launches solar-powered jacket