Billabong deal in doubt

SHAREHOLDERS are due to vote on the proposed $200 million sale to the owners of Quiksilver on Thursday, but the result is far from certain, amid speculation a group of owners could dump the deal.

Billabong flagged the $1 per share arrangement in December, with an independent review backing it in a scheme booklet last month.

However under the company’s constitution, 50 per cent of shareholders need to vote, and 75 per cent of votes must be in favour, for the scheme to be approved.

Media reports yesterday suggested shareholders with combined interests of 15 per cent were against the deal, which is supported by Billabong directors.

Boardriders is majority owned by funds manager Oaktree Capital, which already holds 19 per cent of Billabong shares and is a major lender to the company.

Billabong shares, trading at 79¢ before the proposal was announced, have hovered around 96¢ since, adding more than $39 million to the company’s market capitalisation.

Those gains are unlikely to withstand a failed deal, and Billabong directors say the company would also have to sell assets and take other drastic action if the sale is not passed.

A statement from the company yesterday said no other proposal had been presented as a way forward for the beloved Gold Coast company.

“Given the profile of the Billabong Group’s brands and the global attention a process like this attracts, it’s been a huge credit to our team on the Gold Coast and beyond that they’ve remained resolutely focused on our brands and business during this period,” the statement said.

“That focus was highlighted by the recent reconfirmation of our trading outlook.

“In the last few months the Boardriders scheme of arrangement has also been subjected to significant scrutiny and evaluation.

“The Billabong Board has backed the Boardriders scheme as in the best interests of our brands and the business. The founder of the Billabong, Gordon Merchant, has backed the offer. An independent Expert, and a number of Proxy Advisors have also recommended it.

“It’s now in the hands of shareholders.”

The meeting will be held at 10am on Thursday. Billabong shares opened at 95¢ and closed at 96¢ yesterday.