Quiksilver calls on Scope for Billabong bid

Surfwear company Quiksilver has drafted US-based advisory firm Scope to help with its takeover of rival Billabong.

Quiksilver, which carries the name Boardriders at corporate level, lobbed a $1-a-share offer for Billabong, as revealed by The Australian’s DataRoom on Friday.

Billabong and Quiksilver count hedge fund Oaktree as a major shareholder and the move appears to be one that Oaktree is making to consolidate after it recapitalised both companies when they remained in distress. Quiksilver is 90 per cent-owned by Oaktree, which also controls about 40 per cent of Billabong with US hedge fund Centerbridge.

Billabong counts Goldman Sachs as its defence adviser.

Some of Billabong’s smaller investors are said to be pushing back at the Oaktree-backed offer, arguing that a bid of $198 million undervalues the loss-making Billabong, which expects to lift its earnings this year. Billabong shares are trading at 95c.

Its directors have granted the company due diligence in a move some say indicates the bid has the board’s backing.

For the year to June, Billabong booked a $77m loss but $51m in earnings before interest, tax, depreciation and amortisation, which was up 2.8 per cent from the previous corresponding period.