UPDATE 1-Billabong shares tumble on report TPG considering dropping bid

* AFR says TPG considering formally withdrawing from Billabong sale

* Rival Rip Curl has said has been approached * Billabong shares drop as much as 23 pct * TPG declines to comment (Adds detail throughout)

MELBOURNE, Oct 4 (Reuters) - Shares in Australian surfwear company Billabong International Ltd tumbled as much as 23 percent on Thursday after a report that U.S. private equity suitor TPG Capital Management LP was considering ditching its $700 million takeover bid.

TPG was said to be mulling formally withdrawing from the sale process, the Australian Financial Review said, citing unidentified sources.

Only two weeks ago Billabong said another unnamed suitor had dropped out of bidding for the firm, leaving TPG as the sole interested party. Sources told Reuters the second bidder had been Bain Capital LLC.

Rival Australian surfwear company Rip Curl said last month it had received unsolicited approaches from several international companies wanting to invest in the privately held firm, in a deal that could fetch up to A$480 million.

TPG declined to comment on the report. Billabong could not be immediately reached for comment.

Shares in Billabong fell to A$1.015, their lowest in more than three months, and last traded down 18.3 percent at A$1.075.

(Reporting by Miranda Maxwell; Writing by Muralikumar Anantharaman; Editing by Daniel Magnowski)