Billabong board examines $1/share proposal for buyout by Quiksilver owners Boardriders Inc.

BURLEIGH-based surfwear giant Billabong is considering a $200 million proposed sale to the owners of Quiksilver. Here’s what it would mean to shareholders.

Cooper Chapman at the EDP BIllabong Pro Cascais 2017 in Cascais, Portugal.

BURLEIGH-based surfwear giant Billabong is considering a $200 million proposed sale to the owners of Quiksilver.

In a statement to the stock exchange this morning, shareholders were told the proposal from Boardriders Inc was for a $1 cash per share arrangement for the shares, which last traded at 78 cents.

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.

Quiksilver Inc changed its name to Boardriders in March, a move aimed at embracing the company’s full suite of brands, which include Quiksilver, Roxy and DC Shoes.

Billabong has been consolidating its brands, offloading Tigerlily for $60 million and focussing on three core brands — Billabong, Element and RVCA.

SHAREHOLDERS QUIZ BILLABONG BOARD ON DIGITAL STRATEGY

Billabong swimwear is a key part of the business. Photo Steve Baccon

The statement described the proposal as “confidential, indicative and non-binding”, and holding no certainty of a formal offer.

“The indicative proposal is subject to a number of conditions, including due diligence to Boardriders’ satisfaction; securing committed financing; unanimous recommendation from the Billabong Board; and entry into a definitive scheme implementation agreement between the parties,” the statement said.

“Any scheme implementation agreement would also be subject to a number of further conditions, including shareholder and court approvals, and all required regulatory approvals and clearances.”

The proposal will need to clear these hurdles before becoming a formal proposal, a process expected to take several weeks.

Four years into the company’s turnaround strategy, shareholders heard it had posted a $77.1 million net loss despite growth in both the American and European markets.

Billabong CEO Neil Fiske at the company's annual general meeting at its West Burleigh HQ. Picture Glenn Hampson

At the company’s annual general meeting last month, CEO Neil Fiske said the company hit headwinds with increased product costs due to currency changes and a shift in the retail landscape.

“By no means are we satisfied with our results,” he told the meeting.

“But I want to be clear: the fundamental changes we sought are taking hold and showing improvements in the core of the business.”

Billabong has appointed Goldman Sachs as its financial adviser and Allens as its legal adviser.