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Australia's Billabong Receives $556 Million Takeover Offer

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Australian surf wear company Billabong International said on Wednesday it has received a $556 million takeover bid for the company, the latest development in a tumultuous year in which three previous takeover offers failed.

Shares fell as much as 11.2 percent on the news.

Billabong had put its shares in a trading halt on Monday after they hit a two-month high on a report that an independent director had made a takeover offer of up to A$527 million ($556 million) for the company.

Billabong said a consortium including director Paul Naude had offered A$1.10 per share for the company. The shares last traded at A$0.98. The consortium involved Naude as "cornerstone equity investor" and Bank of America Merrill Lynch as lead debt financier.

(Watch Now: Why Billabong Will Remain Painful For Shareholders)

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.

Due diligence is expected to take 4 to 6 weeks. The board expected to consider the proposal and update the market "as it seeks to restore the fortunes of the company," said Billabong Chairman Ian Pollard. Billabong said it expects to deliver full-year underlying EBITDA in the range of A$85-$92 million in constant currency terms, excluding one-off items of A$29 million.

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