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Billabong: TPG Capital makes fresh takeover bid | Billabong: TPG Capital makes fresh takeover bid |
(40 minutes later) | |
Private equity firm TPG Capital has made a fresh takeover bid for Billabong just months after the Australian surfwear maker rejected its earlier offer. | Private equity firm TPG Capital has made a fresh takeover bid for Billabong just months after the Australian surfwear maker rejected its earlier offer. |
TPG has offered 695m Australian dollars ($713m; £460m) or A$1.45 per share, a 32% premium to the closing price on Monday, to takeover the firm. | TPG has offered 695m Australian dollars ($713m; £460m) or A$1.45 per share, a 32% premium to the closing price on Monday, to takeover the firm. |
In February, TPG had offered of A$3.30 per share or A$841m for the firm. | In February, TPG had offered of A$3.30 per share or A$841m for the firm. |
However, Billabong had rejected the offer calling it too low. | However, Billabong had rejected the offer calling it too low. |
Two of Billabong's largest shareholders, Colonial First State Investment and Perennial Value Management, have agreed to sell about 12.5% of Billabong shares to TPG, the surfwear maker said in statement. | Two of Billabong's largest shareholders, Colonial First State Investment and Perennial Value Management, have agreed to sell about 12.5% of Billabong shares to TPG, the surfwear maker said in statement. |
Billabong shares jumped as much as 24% to A$1.36 on the Australian Securities Exchange after the bid. | |
Likely to succeed? | |
Billabong has seen its fortunes dwindle in recent times amid falling demand for its products from some of its key markets. | |
It has cut its earnings forecast and lost almost 80% of its value in the past year. | |
Last month, in a bid to reduce its debt and raise fresh capital, the embattled firm launched a rights issue priced at a 44% discount to its closing price of A$1.83 on 20 June. | |
The move had come under severe criticism from shareholders and analysts, not least because it valued the firm much lower than what TPG had offered to pay. | |
Analysts said that given the problems the firm had faced, the fresh bid from TPG was likely to be successful. | |
"The deal in its current form looks like it could get over the line," said Peter Esho an analysts with City Index in Sydney. | |
"It is more comprehensive and the valuation multiple is fair." |
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