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Quiksilver to acquire all of the shares in Billabong

 

 

Industry Updates

One company will manage Quiksilver and Billabong with smaller brands Roxy & DC now brethren to Xcel, RVCA, Element and VonZipper 

Surfersvillage Global Surf News, 5 January, 2018 - Billabong International Limited announced that it has entered into a Scheme Implementation Deed with Boardriders, Inc. under which Boardriders has agreed to acquire all of the shares in Billabong, other than those already owned by its related entities, at a price of A$1.00 per share in cash, via a scheme of arrangement.

Boardriders is controlled by funds managed by Oaktree Capital Management, L.P.(Oaktree). Oaktree1 already holds 19% of the shares in Billabong, and is one of Billabong's two senior lenders. Oaktree's shares will not be acquired under the Scheme, and Oaktree will not vote its shares on the resolutions to approve the Scheme at the Scheme meeting.

The Scheme consideration of A$1.00 per share represents an implied enterprise value (EV) of A$380 million.

The Billabong Directors unanimously recommend the Scheme

The Billabong Directors unanimously recommend that Billabong shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of Billabong shareholders.

Subject to those same qualifications, each Billabong Director intends to vote all the Billabong shares held or controlled by them in favour of the Scheme.

The reasons for the Directors’ recommendation include the following:

·             Attractive premium: The Scheme consideration of A$1.00 per Billabong share represents an attractive premium of:

o    28% to Billabong's closing price of $0.78 per share on 30 November 2017, being the day prior to the disclosure that Boardriders had approached Billabong with a proposal to acquire the company2;

o    52% to Billabong's 1-month Volume Weighted Average Price (VWAP) of $0.66 per share up to and including 30 November 20172;

o    69% to Billabong's 3-month VWAP of $0.59 per share up to and including 30 November 20172; and

o    52% to Billabong's 6-month VWAP of $0.66 per share up to and including 30 November 2017.2

Commenting on the Scheme, Billabong Chairman, Ian Pollard, said: “While Billabong has made significant operational progress in recent years, the Board is also mindful of the fact that, in the absence of the Scheme, Billabong shareholders face ongoing risks and uncertainties associated with the business. These include risks relating to the state of the global retail market as it affects both Billabong and its wholesale customers; the operations and project risks associated with the execution of Billabong’s strategy; and risks relating to the refinancing of its debt.

"In particular, the Board considers that it will become necessary for Billabong to materially reduce debt if it is to continue with its current strategy which, given the Company’s existing high debt levels is expected to require asset sales or a dilutive equity raising. Having regard to these factors, and the fact that shareholders are being offered an attractive premium for their shares, the Board believes this offer is in the best interests of shareholders.”4

Billabong CEO, Neil Fiske, said: “Billabong's brands’ great strength is their authenticity and heritage. I’m confident those qualities will not simply be protected but enhanced by a new organisation that will have the scale and financial security to continue to support and build them as we enter into a new and dynamic retail environment.”

Read the full press release

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