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Australia's Billabong Says Fresh Takeover Bid Possible

Sunday, 16 Dec 2012 | 10:48 PM ET
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Australian surfwear company Billabong International put its shares in a trading halt on Monday ahead of a possible takeover bid for the company, the latest development in a tumultuous year in which three previous takeover offers failed.

Billabong shares earlier hit a two-month high following a report in the Australian Financial Review that an independent director had made a takeover offer of up to A$527 million ($555 million) for the company.

Billabong requested the halt ahead of an announcement of "a possible change of control proposal". The company did not return two calls seeking comment.

The shares rose as much as 8.6 percent to A$1.015 after the report that director Paul Naude had offered A$1.10 per share for the company. They last traded at A$0.98.

Naude stood aside from his role as president of the Americas in mid-November for six weeks, to look at putting together a buyout proposal.

Billabong was initially approached by private equity firm TPG in February but rebuffed an offer of A$3.30 a share, opting instead to sell half of its watch brand Nixon and raise A$225 million in equity to reduce debt.

The stock continued to sag and TPG, which has a 12.5 percent stake in the company, returned with a reduced A$1.45 per share bid in July. Rival buyout firm Bain Capital came in with a matching bid in September, only to drop out two weeks later.

TPG withdrew its second offer in October.

The environment for retailers in Australia has been tough with nimbler online rivals competing aggressively on price and Billabong's sales in Europe and the United States -- which combined account for more than half of its revenues.

(Read more: Australia Consumer Sentiment Suffers Surprise Dip)

Billabong was saddled with high debt levels after a badly timed expansion just before the global financial crisis hit.

The company dumped its chief executive in May as sales continued to slide and after several profit warnings. It also posted its first annual loss since listing a decade ago.

(Slideshow: Retail's Hottest Emerging Markets 2012)

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