Business news : Billabong Halts Trading Indefinitely Amid Merger Chatter

Billabong International Ltd. on Thursday indefinitely extended a trading halt for its shares as it continues to explore two private equity-backed buyout bids. The news comes as reports have surfaced that both suitors had lowered their offers for Billabong with the business showing some deterioration.

Billabong's announcement comes two days after it first suspended trading on the Australian Stock Exchange to continue negotiations with suitors. Besides Billabong, the company's brands include Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, Xcel, Tigerlily, Sector 9, DaKine and RVCA brands.

A report in the Wall Street Journal said the two suitors had lowered their bids from an initial 527 million Australian dollars (US$549 million), or A$1.10 a share. Analysts told Reuters they expect the final bids to come in lower, A80 cents to A90 cents a share.

Billabong had received matching bids of A$1.10 a share. The first was from a consortium of private equity firm Altamont Capital Partners and VF Corp, and another from Billabong's former U.S. boss Paul Naude and private equity firm Sycamore Partners. VF Corp only wants the Billabong namesake brand and plans to give Altamont the rest of the portfolio.

Since the two groups made their initial offers, Billabong has posted a first-half net loss of A$536.6 million and lowered its full-year guidance, citing difficult trading conditions in Europe and a disappointing performance from its Nixon watch brand.

Billabong's statement from Thursday follows:

The securities of Billabong International Limited (the “Company”) will be suspended from quotation immediately, at the request of the Company, pending an announcement with regard to the result of the negotiations in relation to the process announced on 14 January 2013.

Billabong International Limited (ASX: BBG) refers to its request for a trading halt dated 2 April 2013 in relation to the receipt of proposals in connection with the process announced on 14 January 2013.

In accordance with ASX Listing Rule 17.2, the Company requests an immediate voluntary suspension of trading in its securities so that the Company can continue negotiations in relation to the process announced on 14 January 2013.

The Company requests that the suspension remain in place until such time as the Company is able to make an announcement in relation to such negotiations.

The Company is not aware of any reason why the voluntary suspension should not be granted, nor of any other information necessary to inform the market about the voluntary suspension.

Yours sincerely

MARIA MANNING
COMPANY SECRETARY

to be continued ....


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Source Billabong Inc, through SportsOneSource