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Billabong receives formal approach from TPG

Private equity backer TPG Capital has today formalised a bid for Australian surfwear brand Billabong thought to be worth AUD $765m (£518m).

The Queensland-based company announced today that it had received an offer from TPG Capital, the private equity house, which also owns a stake in US casualwear giant J Crew.

The Billabong announcement stated: “The board of Billabong will consider the proposal and advise shareholders of its views in due course.”

Last Thursday (February 16), it was revealed that Billabong had received a AUD $3 (£2) per share bid from TPG Capital which was conditional on the brand not selling any assets.

The following day (February 17), Billabong announced that it had received a separate offer to sell 48.5% of its Nixon brand to another private equity firm, Trilantic Capital Partners and another 3% of the Nixon brand to Nixon’s own management team.

As part of today’s announcement, Billabong has said that the Nixon deal would remain unaffected by the TPG Capital approach.

Both bids come following a sharp sales decline for the brand in November and December, particularly in Europe.

The brand’s net debt currently stands at AUD $526 (£357m) and Billabong has confirmed that it is to shut as many as 150 of its 677 company-owned stores.

It is also working to reduce costs across all areas of the business, including head office overheads, streamlining its supply chain and marketing spend.

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