-- Billabong yet to decide whether to engage with TPG on A$695.6 million bid
-- CEO says bid being taken seriously
-- Company will reveal new strategy next month
MELBOURNE--Billabong International Ltd. (BBG.AU) Chief Executive Launa
Inman said Wednesday the company's board was yet to decide whether to
engage with U.S.-based private equity giant TPG Inc. on its 695.6
million Australian dollar (US$712.2 million) bid.
Ms. Inman said in an interview TPG's A$1.45-a-share bid was being
taken "very seriously" by Billabong.
"A decision hasn't been made at this stage but certainly it's ongoing
and we will be coming out in the not too distant future with a
decision," she said.
TPG's bid is its third this year but well below the sweetened A$3.30 a
share it offered in February which was rejected by the company as too
low. The initial approach failed after Billabong founders and
directors Gordon Merchant and Colette Paull--who between them own
about 16% of Billabong--said it undervalued the company. At the time,
they said they wouldn't support even a A$4-a-share offer.
Mr. Merchant has since appeared to have had a change of heart. Last
month, he was quoted in local media as saying he felt "bad" about
rejecting TPG's previous offer, and that he was prepared to consider a
new bid.
Ms. Inman said Mr. Merchant was taking part in the board's
deliberations but protocols were in place if his input needed to be
reviewed in future.
TPG has structured its bid so that Mr. Merchant and Ms. Paull can roll
their shareholdings into the bid if they choose, effectively making
them partners with TPG.
Ms. Inman said she still planned to reveal a new strategy for the
struggling surf and snow clothing and accessory retailer late next
month no matter what happened with the TPG bid.
"I do believe that this business does have potential and what we are
doing and the work we're undertaking at the moment, regardless of
whatever the outcomes are, it is work that is absolutely essential and
needs to be done and can only position the business for a better
future," she said.
Billabong's shares have been smashed over the past 12 months as the
company downgraded earnings, sold part of its Nixon brand to ease
debt, closed underperforming stores, and launched a A$225 million
capital raising that almost half of all eligible retail shareholders
snubbed. The company was also hurt as it branched into the retail
space around the time of the global financial crisis when consumers
began to rein in their spending.
At 0540 GMT, Billabong's shares were up half a cent at A$1.32, while
the benchmark S&P/ASX 200 was down 0.2%.
Ms. Inman said despite global economic uncertainty and difficult
trading conditions, "there's always opportunities out there" for the
company, including improving its market share.
She said the company needed to understand its customers and how to
engage with them, improve its retail experience and improve its supply
chain and sourcing.
"As you want to be a business of really cool brands and talking to the
youth you also have to have the professional back of house aspects of
the business in order for it to be effective," she said.
Write to Gavin Lower at gavin.lower@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
July 25, 2012 01:35 ET (05:35 GMT)
No comments:
Post a Comment