* Billabong says unnamed second suitor has withdrawn offer
* Shares drop 8 pct
* Original suitor TPG continues to look at Billabong books
* Withdrawal comes days after Rip Curl is approached
MELBOURNE, Sept 20 One of two suitors for
Australia's Billabong International Ltd has dropped out
of a takeover race for the surfwear retailer, leaving private
equity firm TPG Capital as the sole bidder with its
offer of $700 million.
The withdrawal comes just days after rival Australian
surfwear company Rip Curl said it received unsolicited
approaches from several international companies wanting to
invest in the privately held firm, in a deal that could fetch up
to A$480 million ($502 million).
Billabong, which last month reported its first annual loss
since listing over a decade ago as sales fell 7.9 percent,
revealed on Sept. 6 that a second party had offered around
A$1.45 per share, matching TPG's July offer valued around A$694
That second suitor has withdrawn its offer after being
allowed to assess Billabong's finances, the retailer said on
Billabong never named the second bidder, though Reuters
sources said it was Bain Capital LLC.
Shares in Billabong dropped 8.3 percent to A$1.325 on
"It sends a signal that those calling for a revised offer
probably aren't going to see one," said Peter Esho, analyst at
"It says A$1.45 (a share) is a reasonable level and it's
definitely not a low ball offer. If it was you'd expect one of
the two to have formalised (their offer) or moved on the other.
If it was a screaming buy one of them would have," he said.
Billabong, which has lost nearly half its market value in
six months, snubbed a more generous TPG offer of A$3.30 a share
in February. It then dumped its chief executive in May after
several profit downgrades, and appointed Launa Inman who
previously headed discount chain Target, owned by Wesfarmers
Since the first approach from TPG, which has built up a 12.5
percent stake after winning over two institutional shareholders,
Billabong has sold half of its watch brand Nixon and raised
A$225 million in equity to reduce debt. An aggressive expansion
met with weak sales of its Billabong products, as well as brands
Von Zipper and Element.
Sales have declined in Europe, Canada and Australia, and the
brand has lost much of its cachet with young shoppers. Its
competitors include Quiksilver Inc, Pacific Sunwear of
California Inc and Zumiez Inc.
TPG has said it could raise or lower its price after it has
seen Billabong's books.
The company last month outlined a four-year plan to simplify
its business and revive sales, although it conceded investors
would have to wait two years for the biggest benefits to flow