Dumped ... Billabong's share price tumbles. Photo: Ian Waldie
Billabong has gone into a trading halt after its shares crashed to a record low, suggesting the company will not get a formal takeover offer from either of its private equity suitors.
Billabong did not give any indication of the status of the two bids in its statement requesting its shares be placed in a trading halt until Monday March 25 ‘‘when the company makes an announcement’’.
The private equity companies are due to finish due diligence next week. The company indicated it had no information that would explain the stock plunge.
‘‘The trading halt is requested pending an investigation by the company into trading levels today,’’ the company said.
Billabong, Australia’s largest sportswear company, fell to a record low of 63 cents, the lowest level since an August 2000 stock-market listing, before paring losses to 69 cents at 11:37am.
Two groups, consisting of Altamont Capital Partners and VF Corp on one side and Sycamore Partners Management and Billabong Americas head Paul Naude on the other, have said they may offer $1.10 for the Gold Coast, Australia-based company, valuing the business at $527 million.
Analysts had expected the two parties come back with lower offers around the 90c mark.
Credit Suisse recently reassessed the company’s valuation on the basis that bids fail to emerge and gave the company a weighted valuation of 59c per share.
"Volume today is quite heavy which suggests that something might be up," said Anson Rosewall, an institutional dealer at BBY Ltd. in Sydney. "It may have been operator error, the second thing going round is that there's going to be no bid."
Chris Fogarty, a Sydney-based spokesman for Billabong, didn't return a mobile-phone message and e-mail seeking comment.
The company last month posted a record loss on $567 million of charges as it wrote off most of the value of its main brand. Billabong will post 80 per cent of its assets and 85 per cent of its earnings as security to its lenders after brand and goodwill writedowns put it in breach of terms on its debt, it said at the time.
With BLOOMBERG
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