The Financial Review is reporting that Paul Naude backed by Sycamore Partners is the frontrunner in the bid to buy Billabong. They are reported to be looking at 73c a share, over 30% off their initial indicative price of $1.10. This values the company at $349.6 million, a far cry from the $850 million figure that TPG was putting out last year.
The rival bid from VF Corp apparently has a few additional conditions attached to it, like needing more time to firm up the offer. They came to the process a little later than Naude’s group. However their offer is also rumored to be significantly lower than $1.10.
According to Business Spectator, the shares are likely to remain on a trading halt as Billabong directors try and negotiate up the price. Analysts have said that a deal is almost certain due to the financial situation of the company. Were a deal not to happen, The Australian reported that “Billabong would be forced to raise significant capital — about $100m — to repair its balance sheet.”
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