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Updates on Billabong & TPG talk
28 Feb '12
2 min read
The Board of Billabong International Limited refers to its previous update on the TPG Capital (TPG) proposal on 27 February 2012. The Board and its advisers have now had further discussions with TPG to give TPG the opportunity to increase its non-binding indicative price of $3.00 per share to better reflect the value of the company.
In those discussions, TPG was also made aware of the attached letter, received by the company after market close yesterday, from the lawyers of Billabong's Non-Executive Director and major shareholder, Gordon Merchant, and Non-Executive Director Colette Paull, advising that Mr Merchant and Ms Paull 'do not support Billabong taking any steps to assist or facilitate a proposal by TPG Capital, including allowing TPG Capital to commence due diligence on Billabong, even if the price TPG Capital offered was $4.00 per share' which Mr Merchant and Ms Paull 'consider would still represent a discount on the true value of Billabong shares'.
Following those discussions and notwithstanding the contents of the letter, TPG has now indicated that it would be prepared to increase the indicative price under its proposal from $3.00 per share to $3.30 per share to facilitate due diligence.
The Board has considered this revised price and has unanimously determined that it still does not reflect the fundamental value of the company in the context of a change of control.
As a result, discussions between the two parties have ceased. However, the Board is prepared to engage with TPG or any other party that makes a proposal which is in the best interest of the company and its shareholders.
As announced on 27 February 2012, the Board believes Billabong has an attractive independent future. Billabong is a leading global wholesaler and retailer in the boardsports sector and its brands are world-renowned and highly valued, as demonstrated by the partial sale of its Nixon brand, which valued that single brand at US$464 million or 9.2x LTM EBITDA1.
In addition, as a result of the strategic capital structure review which includes planned cost saving initiatives, the company is now on a much more secure footing and is well-positioned to grow and create value for shareholders.
In those discussions, TPG was also made aware of the attached letter, received by the company after market close yesterday, from the lawyers of Billabong's Non-Executive Director and major shareholder, Gordon Merchant, and Non-Executive Director Colette Paull, advising that Mr Merchant and Ms Paull 'do not support Billabong taking any steps to assist or facilitate a proposal by TPG Capital, including allowing TPG Capital to commence due diligence on Billabong, even if the price TPG Capital offered was $4.00 per share' which Mr Merchant and Ms Paull 'consider would still represent a discount on the true value of Billabong shares'.
Following those discussions and notwithstanding the contents of the letter, TPG has now indicated that it would be prepared to increase the indicative price under its proposal from $3.00 per share to $3.30 per share to facilitate due diligence.
The Board has considered this revised price and has unanimously determined that it still does not reflect the fundamental value of the company in the context of a change of control.
As a result, discussions between the two parties have ceased. However, the Board is prepared to engage with TPG or any other party that makes a proposal which is in the best interest of the company and its shareholders.
As announced on 27 February 2012, the Board believes Billabong has an attractive independent future. Billabong is a leading global wholesaler and retailer in the boardsports sector and its brands are world-renowned and highly valued, as demonstrated by the partial sale of its Nixon brand, which valued that single brand at US$464 million or 9.2x LTM EBITDA1.
In addition, as a result of the strategic capital structure review which includes planned cost saving initiatives, the company is now on a much more secure footing and is well-positioned to grow and create value for shareholders.
Billabong International Limited
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