* Proposal price cut to over A$0.60/shr from A$1.10
* Billabong in exclusive talks with Sycamore Consortium
* Shares suspended at A$0.73; set to fall when trade resumes
SYDNEY, April 9 Australian surfwear company
Billabong International Ltd will enter 10 days of
exclusive talks with a consortium led by its former U.S. boss
after the group cut its indicative takeover proposal by 45
percent to $300 million.
Paul Naude and private equity firm Sycamore Partners are now
offering A$0.60 per share, Billabong said in statement on
Tuesday, confirming reports the bid would be scaled back.
Billabong and its shareholders have endured a horrible year
since rejecting a A$850 million ($883 million) bid from rival
private equity firm TPG Capital, in February 2012.
Plagued with high debt from an ill-timed expansion and
struggling as its brands fell out of favour, the company has
sold assets, closed stores, replaced its chief executive and
embarked on a new strategy as a series of takeover proposals
came and went.
Naude and Sycamore Partners beat out a rival bid from a
consortium comprised of private equity firm Altamont Capital
Partners and U.S. clothing group VF Corp. Both bidders
had initially proposed A$1.10 a share before conducting due
"I think it probably does progress. I don't think they have
too many options left," said Jason Beddow, managing director of
Argo Investments, which manages A$3.5 billion and has a small
stake in Billabong. "It's such a small company now, such a small
investment for anyone. I think it lost relevance as well."
The VF Corp and Naude offers were the fourth and fifth
takeover approaches for the Australian company since February
2012, the first pitched at A$850 million and rejected as too
Billabong shares have been halted from trading since last
week, having last traded at A$0.73. The stock, which has lost
around two-thirds of its value in the past year, sank to an
all-time low of A$0.63 last month.
The latest Sycamore proposal includes the option for
shareholders to accept shares in a Sycamore affiliate to be
incorporated to make the bid. Founder and top shareholder Gordon
Merchant plans to accept the scrip bid in the absence of a