Australian surfwear company Billabong International said it will sell a stake in its Nixon brand watch brand and close up to 150 stores to fend off a $820 million private equity bid, sending its shares up by more than 50 percent on Friday.
Billabong confirmed it had received an offer from buyout firm TPG Capital for A$3.00 cash per share, or A$765 million ($820 million), but said that deal was subject to several conditions including financing and no major asset sales.
"In the absence of certainty, Billabong has proceeded with the partial sale of Nixon in order to stabilize its balance sheet," the company said.
Shares in Billabong leapt to a two-month high of A$2.93 after a trading halt was lifted, up 64 percent from a last trade of A$1.79 before the halt.
But the share price is still well down from over A$9 in February 2011 as its main markets, Europe and the United States, have grappled with weak economies. Its shares had fallen 44 percent on Dec 19 after it warned first-half earnings would slump by up to a quarter.
On Friday, Billabong said the partial sale of Nixon to Trilantic Capital Partners would result in net proceeds of $285 million, all of which would be used to pay down debt.
Nixon was acquired in January 2006 from founders Andy Laats and Chad DiNenna. It is a dominant player in the boardsports watch market.
Billabong, with more than 670 stores globally and brands including Von Zipper and Tigerlily, has suffered from a debate over the relevance of its brands, with analysts at UBS pointing to the trend towards "fast-fashion" and away from action sports in recent years.
Billabong said it would close 100 to 150 underperforming stores globally, with about 400 job losses.