By Gavin Lower and Gillian Tan
MELBOURNE--Australian surfwear retailer Billabong International
Ltd. (BBG.AU), at the center of a takeover tussle between two U.S.
consortia, said Thursday it is investigating the reasons for a fall
of as much as 22% in its share price.
Billabong requested that trading in its shares be halted until
Monday at the latest while the investigation takes place. Its
shares traded at 69.5 Australian cents, down 14%, when the halt was
granted, having touched a low of 63 Australian cents.
The former head of Billabong's Americas division, Paul Naude,
has teamed up with private equity firm Sycamore Partners Management
to make a 526.8 million Australian dollar (US$542.6 million) offer
for the company. VF Corp. (VFC), the owner of Timberland and The
North Face brands, joined up with Altamont Capital Partners to
match the A$1.10-a-share offer from Mr. Naude's group.
Two people familiar with the deal talks involving two U.S.
groups said neither party has indicated that they are walking away
ahead of a March 28 deadline to make final bids.
Credit Suisse analyst Grant Saligari on Wednesday published a
note reiterating a A$1.10 a share price target on the stock,
reflecting "the likelihood of a takeover proceeding from one or
more of two private equity proposals."
Billabong had a market value of A$3.8 billion as recently as
2007, but the company has recently been battling to reverse an
earnings decline triggered by the global slowdown, a strong
Australian dollar that has diluted overseas income, and the
dwindling appeal of its core brands among younger people. Sales in
the Americas and Europe have fallen sharply as cautious consumers
rein in spending or switch to other brands, leading to a build up
of surplus clothing stock.
Write to Gavin Lower at gavin.lower@wsj.com and
gillian.tan@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires