Quiksilver enlists Scope for Billabong takeover

Some of Billabong’s smaller investors are said to be pushing back at the Oaktree-backed offer.

Surfwear company Quiksilver has drafted in the US-based advisory firm Scope to advise on its takeover of rival Billabong.

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

Both companies count Oaktree as a major shareholder and the move appears to be one by the hedge fund to consolidate the space after it recapitalised both companies when they remained in distress.

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 currently trading at 95c.

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

Quiksilver is 90 per cent-owned by hedge fund Oaktree, which also controls about 40 per cent of Billabong with US hedge fund Centerbridge.

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.

The company was founded in 1973 by Gordon and Rena Merchant and was listed in 2000 before facing a near collapse and being recapitalised by hedge funds in 2013.