Billabong favours Boardriders takeover
Directors unanimously back deal, urge shareholders to give proposal go-ahead
Billabong is recommending shareholders accept a formal buyout proposal by the owner of Quiksilver, Roxy and DC Shoes. The company on Friday said it had entered into a scheme of arrangement under which Boardriders would acquire all its ASX-listed shares other than the 19 per cent owned by Oaktree Capital Management, which already controlled Boardriders.
The offer was worth $1 per share, a premium of 28 per cent to Billabong’s 78 cent closing price on November 30 — the day before the proposal was first announced.
Billabong directors have unani- mously backed the scheme and are urging shareholders to vote in favour of it.
The boardsport apparel and accessories business has been subject to a number of takeover bids, including from US private equity groups TPG and Sycamore during the 2013 financial year when its annual loss swelled to almost A$860 million ($943.3m)
The Gold Coast-based retailer and wholesaler recorded a A$77m loss in the 2017 financial year, worse than the previous year’s A$24m loss.
Chairman Ian Pollard said the company board was mindful of the ongoing risks and uncertainties associated with the business, including the state of the global retail market, project risks and refinancing debt risks. “The board considers that it will become necessary for Billabong to materially reduce debt if it is to continue with its current strategy which, given the company’s existing high debt levels, is expected to require asset sales or a dilutive equity raising,” Pollard said on Friday. “Having regard to these factors, and the fact that shareholders are being offered an attractive premium for their shares, the board believes this offer is in the best interests of shareholders.” Boardriders chief turnaround officer Dave Turner will replace Pierre Agnes as chief executive of the company after the deal’s completion, if approved. Agnes will become Boardriders president and remain a board member.
Tanner said Boardriders aimed to preserve Billabong and accelerate growth of its brands: “We are excited to become one family with the Billabong team and look forward to working together arm-in-arm to achieve the promise that this combination offers.”
Boardriders had also asked Billabong boss Neil Fiske to consider a role with it once the transaction was completed. The deal is subject to shareholder, court and regulatory approvals and is expected to be finalised in the next six months.
Billabong reaffirmed its 2018 fullyear guidance, expecting earnings to exceed the previous year’s and to be A$51.1m to A$54m. Its shares closed up 2.25c, or 2.3 per cent, to 98.25c on Friday.