* TPG returns with A$3 per share offer
* Billabong advises shareholders to take no action
* Shares up another 10 pct
MELBOURNE, Feb 20 (Reuters) – Private equity firm TPG
Capital renewed an $825 million takeover offer for
Australian surfwear company Billabong International on
Monday, saying Billabong’s planned sale of one of its most
profitable brands would not be an obstacle.
The news sent Billabong’s share price up by 10 percent,
surging for a second day.
TPG approached Billabong early last week with a
A$3-per-share offer worth A$765 million ($825 million), but
attached conditions including no asset sales for the struggling
retailer and manufacturer.
Billabong rebuffed the offer, announcing it would instead
sell a half-share in its Nixon watch brand, one of its strongest
brands, to raise $285 million to pay down debt.
The deal valued the Nixon brand at $464 million. That
compared with Billabong’s market capitalisation before the
takeover approach of $493 million. Billabong has more than 670
stores globally, but plans to shut up to 150 underperforming
outlets.
“(The latest) proposal is subject to due diligence, subject
to finance and conditional on a number of other matters, but it
does not preclude the Nixon transaction announced on Friday 17
February 2012,” Billabong said.
Billabong said it would consider TPG’s proposal and advised
shareholders to take no action.
“Now that we have confirmation that TPG is still interested,
notwithstanding the Nixon transaction, that provides a little
bit more concrete price support,” said Deutsche Bank analyst
Michael Simotas.
On Friday, shares in Billabong leapt to a two-month high of
A$2.93 after a trading halt was lifted, up 64 percent from a
last trade of A$1.79 before TPG’s initial approach.
But the share price is still well down from over A$9 in
February 2011 as its main markets, Australia and the United
States, have grappled with weak consumer spending. Its shares
dived 44 percent on Dec. 19 after it warned first-half earnings
would slump by up to a quarter.
Goldman Sachs is advising Billabong.