California Apparel News

Shareholders of Billabong International Limited approved a merger with rival Boardriders Inc., putting an end to protests by Billabong’s dissident shareholders.

Some of the Australian surfwear giant’s shareholders balked at Boardriders’ offer to pay $1 per share. Boardriders, based in Huntington Beach, Calif., sweetened the deal by raising the price to $1.05 per share. A Billabong statement said that more than 95 percent of its shareholders voted for the merger and more than 85 percent of the company’s shareholders voted.

The deal, reached on March 28, still needs to be approved by an Australian court, where an appeal can be filed. If the court approves the deal, it is scheduled to become effective by April 9.

Boardriders Chief Executive Dave Tanner said the deal will help build a stronger action-sports industry. “We believe that this transaction represents the best value for all stakeholders—shareholders, employees, vendors and customers. We are pleased to see that the Billabong shareholders recognized this value and have approved the proposed acquisition. We have now cleared a significant milestone, and we are one step closer to creating the world’s leading action-sports company,” he said.

Billabong founder Gordon Merchant supported the bid. However, some Billabong shareholders felt that they had no choice but to accept the deal, according to The Sydney Morning Herald. “Sell out to a lowball offer from Boardriders or face the business going bust,” the article said, summarizing the view of some shareholders.

Before the vote, media outlets quoted Tanner as saying if the deal didn’t go through, Billabong would collapse. The Australian company has been working under heavy debt and declining earnings.

Neil Fiske, Billabong’s chief executive officer, acknowledged that the company is navigating through rough water. “We have made substantial progress over the last four years, but we have had to confront tens of millions in adverse currency movements on our product costs, industry bankruptcies and account closures across multiple geographies and fundamental channel shifts away from bricks and mortar,” he said in a Feb. 23 statement. “The fact that a number of industry participants are currently undergoing a sales process is yet another indication of the tremendous disruption that we are witnessing.”

One surfwear company being put up for sale is Volcom in Costa Mesa, Calif. Its corporate parent, Kering, announced it was exploring a sale earlier this year.