Altamont to take major stake in Billabong International

After months of uncertainty, Billabong International is ready for the buyout. United States-based private equity firm Altamont Capital Partners is set to take a major stake in Billabong International this week, as broke by Australian media

on Tuesday.

Altamont Capital Partners has offered Billabong 395 million dollars for a 40 percent stake in the surf wear company. Despite both parties seem to be happy with the agreement; they need to wait until the Australian Takeover Panel rules its verdict on the acquisition, expected for later this week.

''The transaction reflects the Altamont consortium's confidence in the value of Billabong's brand,' stressed the company’s chairman. It’s noteworthy that Billabong has lost 76 per cent of its market value over the past year. It has placed its shares in a trading halt on Tuesday 16th of July, citing developments in refinancing and asset-sale plans.

Hedge funds Oaktree Capital and Centerbridge Partners, which earlier bought nearly 300 million dollars of senior debt at a discounted price, proposed a majority buyout of Billabong. They argued that the Altamont deal was “un-competitive and coercive”.

Altamont to acquire 40 percent in Billabong International

The panel declined interim orders to delay the drawdown of the bridging facility and sale of Dakine, but has yet to make any final decision that could fully stop the Altamont deal, as broadly covered by Australian media.

The Australian Shareholders’ Association over the weekend urged the panel to ban a 65 million dollars break fee for the Billabong’s proposed recapitalisation plan to allow for a competitive auction for the surf wear group.

The break fee represents 20 percent of the 325 million dollars of debt being put forward, compared to the average break fee of about 1 percent of the deal value.

'The board believes that the Altamont consortium's refinancing, and the changes being announced provide the company with a stable platform and the necessary working capital to continue to address the challenges it faces,'' Billabong chairman Ian Pollard said when the deal was made public.

''The Altamont consortium presented the best available, certain and executable opportunity in these challenging circumstances,'' Pollard added.

Earlier in July, Billabong took up the 395 million rescue package offered by private equity firm Altamont. Under the refinancing deal, pencilled by chairman Ian Pollard, Altamont will acquire a majority stake in the company, expected to come at 40 percent of the total.

Altamont will also take control of Billabong's Dakine brand and finalise its 294 million (325 Australian dollars million) bridging loan to Billabong.