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BILLABONG’S shares jumped more than 32.8 per cent today on speculation that a private equity consortium has agreed to acquire the company’s $400 million debt.
The speculation, driven by a report in the Australian Financial Review, has lifted Billabong’s shares as much as 13.7c to a high of 33.2c – or almost three times the value at which they were trading last week.
Oaktree Capital Management and Centerbridge Partners are rumoured to have struck a deal for the Billabong debt which is said to have been acquired from Billabong’s lenders at a discount of up to 15 per cent of par value.
Oaktree is the company behind the debt-for-equity deal that saved Channel Nine parent Nine Entertainment Co from hitting the financial wall.
Oaktree is widely known for taking a hands-on approach to managing its acquisitions which opens a new front in the battle for control of Billabong.
The news comes just weeks after Billabong revealed it was in talks with two potential suitors – Altamont Capital and Sycamore Partners - to refinance the company’s debt.
It is understood that a team from Altamont, including principle Jesse Rogers, visited Billabong’s headquarters this week as part of the company’s prolonged due-diligence process.
Altamont is said to have made a presentation to Billabong on its takeover proposal yesterday, with Sycamore expected to do the same in coming days.
A Billabong spokesman could not be contacted by Gold Coast Business News for comment.
The Sycamore consortium is headed by Billabong’s long-time US boss Paul Naude, while Altamaont has teamed up with global apparel group VF Corporation.
The most recent news from Billabong is that it entered talks with both parties over potential refinancing plans that also involve potential asset sales.
Details of which assets are on the chopping block had not been disclosed but Billabong is considering the sale of Canadian retail chain West 49 which it acquired in 2010.
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