The embattled retailer says it has received a confidential, indicative and non-binding proposal from Boardriders – whose majority owner Oaktree Capital already has a 19 per cent stake in Billabong.
The scheme of arrangement values Billabong shares at a six-month high of $1 each, 22 cents above Thursday’s closing price.
Billabong says it has opened its books for due diligence, however, there is no certainty that the indicative proposal will result in an offer for the company.
The Gold Coast-based retailer, which has been losing money for several years, recorded a $77 million loss in the 2017 financial year, worse than the previous year’s $24 million loss.
Contributing to the disappointing result were total impairment charges of $106.5 million, including the discontinuation of the Tigerlily swimwear brand, and a fall in revenue.
“After consideration by the board and the company’s advisers of the indicative proposal, the board decided to grant due diligence access to Boardriders to enable Boardriders to put a formal proposal to Billabong,” Billabong said in a statement.
The process is likely to take a number of weeks.
Billabong has appointed Goldman Sachs as its financial advisor and Allens as its legal advisor.
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