Billabong shareholders approve takeover by Boardriders
It’s official…almost. In the absence of any unforeseen hurdles, Boardriders is to take over struggling Australian action sports company Billabong after the latter’s shareholders approved the deal.
With the original A$1.00 share bid for the company having been criticised as too low by some analysts and investors, Boardriders sweetened it with a rise to A$1.05 ahead of the Billabong shareholders meeting on Wednesday. That was enough to get the 75% support needed.
There were still dissenting voices and even those who voted for the deal didn’t necessarily see it as a strong one, but with analysts saying the alternative could have been for Billabong to go under, shareholders had to face up losing their investments altogether.
The final offer represented a 34.6% premium to Billabong's closing price of the day before Boardriders’ bid was first announced back in January. The new owner already had a near-20% stake in Billabong and with the surfwear firm’s board and founder Gordon Merchant, as well as major shareholders Ryder Capital and Adam Smith Asset Management, backing the takeover, it would have taken a lot for any unhappy shareholders to have been able to block it.
Boardriders, which also owns and operates the Quiksilver, Roxy, and DC Shoes brands, said it was the best way forward.
Its CEO Dave Tanner said: "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 recognised 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. We look forward to uniting the Billabong and Boardriders communities and building a foundation to better showcase and grow the action sports industry.”
The transaction should close on or around April 24, subject to final approvals.
Billabong had reported a A$18.4 million half-year loss in February and warned at the time that if the Boardriders deal didn’t go through, it could be forced to dilute shareholders’ stakes via an equity raising or sell assets due to its huge A$138.6 million debt load.
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