Independent expert gives Billabong takeover green light

BillabongBillabong’s board continues to recommend company shareholders vote in favour of the proposed acquisition by US firm Boardriders, after independent expert Grant Samuel & Associates said the scheme was fair and reasonable.

The surfing retailer announced in January that it had entered into a Scheme of Arrangement under which Boardriders Inc would acquire all of the Billabong Shares at a price of A$1.00 per share in cash.

Boardriders is controlled by funds managed by Oaktree Capital Management, which holds approximately 19.3 per cent of Billabong shares and is one of the retailer’s two senior lenders.

The approximately $198 million deal, if approved by shareholders, will combine two of the largest global active sports brands.

Gordon Merchant, a director of Billabong owns 12.8 per cent of the company’s shares and also intends to vote in favour of the scheme.

In January, Billabong chairman Ian Pollard said despite making “significant operational progress in recent years” that it will become necessary for the retailer to materially reduce debt if it is to continue with its current strategy.

Pollard said given the company’s already high debt levels, it is expected to require asset sales or a dilutive equity raising.

A meeting has been scheduled for March 28 for shareholders to vote on the scheme.

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