QUEENSLAND – Private equity firm TPG has announced to walk away from the expected takeover of Australian surf brand Billabong, causing Billabong’s shares to drop by 22 per cent.
Both companies have been negotiating since July, which eventually lead to TPG dropping its $694.5 million offer. Billabong wanted to sell for $1.45 per share, which caused TPG to back out of the negotiation. The private equity firm is not the first to walk away from taking over Billabong. Bain Capital had made an offer in September but withdrew it a few weeks later.
Billabong’s finances have been going downhill for a while but there is still hope. According to Cameron Securities private client adviser Henry Jennings, “If they get some decent weather in Europe, as in cold winters and hot summers, they can sell snowboards and board shorts in the right seasons. If the U.S. economy picks up, then there’s light at the end of the tunnel but it might take a while.”
Brand new Chief Executive Launa Inman and Chairman elect Dr Ian Pollard are implementing a transformation strategy; closing stores, reducing product lines and expanding online operations. “The board is pleased with the progress around the transformation strategy and structural organisational change being driven by CEO Launa Inman,” Chairman Ted Kunkel said in a statement.
Image Courtesy: Wikimedia Commons.