Billabong: trading halt while shareholders withdraw

All eyes are on Billabong these days, as the extended negotiation period agreed in April has reached its end and so will the trading halt requested by the own retailer on Wednesday. In the meantime, Teachers Insurance and Annuity Association (TIAA) has

sold down its substantial stake in the surf wear company.

Billabong International Ltd., which is traded on the Australian Securities Exchange, requested a trading halt Wednesday as it continues negotiations so that the market “does not trade on an uninformed basis.”

The halt is expected to be lifted by Thursday, a day after the set deadline for considering an offer for the company, Billabong International said in a statement earlier this week.

Billabong’s shares last traded at 0.47 dollars, giving the company a market value of 229.86 million dollars.

In the meantime, one of Billabong International's largest shareholders, TIAA-CREF, has shown its disappointment in the latest developments by selling down its substantial stake at a considerable loss. In fact, TIAA revealed it is no longer a substantial shareholder.

TIAA no longer a substantial shareholder

According to filings to the Australian Securities Exchange on Wednesday, TIAA had sold more than 10 million shares since March 18, reducing its stake from 6.2 percent to less than the 5 percent required to be considered a substantial holder.

Billabong Americas President Paul Naude, who stepped down from the position temporarily to tackle the possible purchase, offered 299 million dollars, or 0.60 dollars per share for Billabong in a joint offer with private equity firm Sycamore Partners.

The offer is reduced from an original conditional offer in December of 550.8 million dollars, which was matched a month later by private equity firm Altamont Capital and VF Corp. The drawn-out process has dented Billabong´s share price, which last traded at 45.5 cents.

While the due diligence was supposed to conclude before Easter, the company has since granted a consortium, led by the US-based private equity firm Sycamore Partners, two 10-day extensions so its lenders could undertake an independent financial audit before firming up an offer, reported ‘The Australian’. The latest extension expired Wednesday night.