Oaktree Takeover Caps Spectacular Wipeout of Aussie Surf Giant

(Bloomberg) -- Oaktree Capital Group Holding's takeover of Billabong International Ltd. caps a spectacular wipeout of what was Australia's largest surfwear company.

Oaktree subsidiary Boardriders Inc. agreed to buy the Gold Coast-based company for A$1.00 per share, 28 percent more than the closing price the day before making a non-binding proposal Dec. 1. The bid values Billabong at A$198 million ($155 million) compared to its peak of A$3.8 billion in 2007.

Billabong has attempted to turnaround its business amid falling sales and increased manufacturing costs since it accepted a refinancing offer from Centerbridge Partners LP and Oaktree in 2013. That was after it was forced to write off the value of its namesake brand when it breached its debt terms and revenue fell below its operating costs. 

Still, shareholders faced uncertainty if the strategy continued without the takeover as the company would need to materially reduce its debt, either by further asset sales or an equity raising, Chairman Ian Pollard said in a statement. “The fact that shareholders are being offered an attractive premium for their shares, the Board believes this offer is in the best interests of shareholders.”

The stock fell 99 percent to a A$0.50 low in September last year from a A$58.39 peak more than a decade ago. Shares were trading 2.3 percent higher at A$0.98 as of 1:41 p.m. in Sydney.

Billabong reaffirmed its full-year guidance despite trading during the holiday period being at the low end of expectations.

To contact the reporter on this story: Matthew Burgess in Sydney at mburgess46@bloomberg.net.

To contact the editors responsible for this story: Edward Johnson at ejohnson28@bloomberg.net, Naoto Hosoda, Margo Towie

©2018 Bloomberg L.P.