ACQUISITIONS
Billabong in Exclusive Talks With Naude
A member of the Billabong corporate family is in exclusive talks to acquire the Australian-headquartered Billabong International Ltd., it was announced April 9.
The surf giant started a 10-day period of negotiations with Paul Naude, former president of Billabong’s Americas division, headquartered in Irvine, Calif., and Sycamore Partners, a New York–headquartered private equity firm, which owns women’s retailer The Talbots Inc. Naude resigned his position in November to start the bid to take over Billabong.
Naude and Sycamore propose to purchase 100 percent of Billabong’s shares for AUD $.060. During the 10 days of talks, Sycamore will investigate the surf giant’s finances.
Bid prices for Billabong have sharply declined. When Sycamore made its initial bid in January, it offered AUD $1.10 per share. Its rival for this sale, Altamont Capital Partners of Palo Alto, Calif., and VF Corp. of Greensboro, N.C., also offered AUD $1.10 for its initial offer.
Since the initial offers, Billabong reported a net loss of AUD $536.6 million for the six month period which ended Dec. 31, 2012. A Billabong statement blamed a poor macro-economic environment for the decline, along with closing some of its stores in its sprawling fleet of more than 600 stores around the world.
Naude’s possible takeover of Billabong was cheered by many retailers such as Todd Roberts, co-owner of Santa Monica, Calif.–based ZJ Boarding House, which runs a 3,000-square-foot Billabong boutique on its compound.
Naude is popular because of his deep roots in surf industry. He was appointed president of Billabong’s American operations in 1998 and has worked in the surf apparel business since 1973.
“He can speak with shareholders and the board,” Roberts said. “At the same time, he can speak to the retailer and the people on the front line selling product. It bodes well for the brand having someone intelligent as he is. He also has his feet in the water.” Naude surfs, grew up in board sports culture, and also serves on the senior advisory board for Surf Industry Manufacturers Association, based in Aliso Viejo, Calif. The possible takeover will be an important event for the action-sports world, said Gregory N. Weisman, West Coast chair of apparel industry practices group for Los Angeles law firm, Ritholz Levy Sanders Chidekel & Fields LLP. in a recent interview.“There is so much wholesale and retail real estate directly and indirectly owned by that entity.” Weisman has been active in the action-sports market for more than 15 years, but he does not represent Billabong.
Billabong owns some of the most popular brands in action sports such as California-headquartered brands RVCA, Element and Oregon-based Da Kine, owns Von Zipper, Honolua Surf company, Xcel, Sector 9 and more than 600 company-owned stores around the world, running prominent Southern California surf boutique chain Becker Surf. It also maintainsa stake in popular accessories brand Nixon.
