By Ross Kelly
SYDNEY--Australian surfwear retailer Billabong International
Ltd. (BBG.AU) Tuesday said it has begun exclusive bid talks with a
consortium led by private equity firm Sycamore Partners.
Billabong said the group has offered 60 cents cash for each of
its shares. Alternatively, investors can take shares in a new
company affiliated with Sycamore.
The cash offer values the company at about 287 million
Australian dollars (US$299 million) excluding debt, confirming a
report by The Wall Street Journal on Monday.
A separate consortium involving VF Corp. (VFC), the owner of
brands including The North Face and Timberland, and Altamont
Capital Partners had earlier made an indicative offer to acquire
Billabong but has now been frozen out of talks.
The Sycamore-led consortium, which also includes the former head
of Billabong's Americas division Paul Naude, has been granted an
exclusivity period of 10 business days.
Its offer is conditional on large Billabong shareholders Gordon
Merchant and Colette Paull selecting shares rather than cash,
Billabong said.
Mr. Merchant and Ms. Paull, who together hold about 16% of
Billabong's shares, have said they are prepared to agree to that
condition, it added.
Billabong said Sycamore wants to own at least 75.1% of the
affiliate company. If existing investors owning more than 25% of
the surfwear retailer choose to take shares instead of cash, the
share allocation will be scaled back.
-Gillian Tan contributed to this article.
Write to Ross Kelly at ross.kelly@wsj.com
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