SYDNEY U.S. hedge funds Oaktree Capital Management and Centerbridge Partners on Friday asked Australia's takeover regulator to intervene in surfwear company Billabong International Ltd's (BBG.AX) $359 million refinancing deal with Altamont Capital Partners.
Oaktree and Centerbridge, whose own refinancing proposal was rebuffed by the company, are claiming elements of the deal including a hefty break fee "amount to lock-up devices that are anti-competitive and coercive."
The pair are asking the Takeovers Panel to delay the drawdown of a $294 million bridge facility and the sale of Billabong's DaKine brand to Altamont, both expected to occur early next week, until the panel investigates the issue.
The Takeovers Panel said it had received the application and was considering whether to investigate further.
Billabong said in a statement it "disagrees with the basis for the application."
Billabong announced a refinancing deal with Altamont on Tuesday, unveiling plans to issue Altamont share options for 15 percent of the company along with the sale of the DaKine business.
The company said Thursday it had received a proposal from the two hedge funds, which recently bought some of Billabong's debt from senior lenders, after it had entered into the binding agreement with Altamont.
Billabong began refinancing and asset sale talks with two former takeover suitors -- one led by its former U.S. boss Paul Naude and private equity firm Sycamore Partners, and the other by Altamont and U.S. clothing group VF Corp (VFC.N) -- last month after both walked away from indicative offers at A$1.10 ($1.01) a share.
Plagued with high debt from an ill-timed expansion and struggling as its brands fell out of favor, Billabong has issued a series of profit warnings since rejecting a A$850 million bid from private equity firm TPG Capital Management TPG.UL in February 2012.
The company's shares were up 8.8 percent at A$0.40 on Friday, from a high of A$13.56 six years ago.
(Reporting by Jane Wardell; Editing by Stephen Coates)