Billabong is caught between the bargain bin and the reject pile with its latest suitor dragging out talks in a manner that suggests its 60¢ a share tentative offer is no longer on the table, and it may not be able to reach terms with the surf retailer’s board.
Billabong went from a trading halt to voluntary suspension on Thursday as bid negotiations continue with Billabong executive Paul Naude and private equity group Sycamore.
Billabong has requested that the suspension to remain in place until “such time as the company is able to make an announcement in relation to such discussions”.
The company has repeatedly said there is no guarantee discussions will lead to a firm offer.
Some of its major shareholders are not waiting for an outcome.
TIAA CREF Investment Management ceased to be a substantial shareholder this week, selling shares for as little as 46.7¢ on Monday.
Franklin Resources has also reduced its stake, selling shares for 48¢ in its last reported sale. Billabong last traded at 45.5¢.
UBS has said the company may need to raise another $100 million from the market if the bid fails. The company raised $225 million in the middle of last year at just over $1 a share. UBS said the fact that the 60¢ offer price has been put forward by the board suggests the directors have “a low level of confidence” in the turnaround strategy put forward in August last year.
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