Ann: TPG Proposal Update , page-15

This is a very positive article.


http://www.theage.com.au/business/billabong-chief-faces-pressure-on-strategy-20120727-22zu4.html

I particularaly like this bit -

'Shareholders in Billabong - including, it is believed, major shareholder and company founder Gordon Merchant - support TPG being allowed to conduct due diligence as they think it will lead to a much higher offer price.'


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Many have felt that BBG has to be sold and that a price from $1.35 - $1.75 is fair value; I personally don't subscribe to this sentiment.

I can understand new stock owners wanting to cash in on the TPG offer, or the older holders wanting to cut their losses. It has had a terrible run, it did its LT holders a bum deal in the cap raising, they've made some bad decisions and the share price has been punished for it. It is also still getting criticised by analysts and rightly so.

However, IMO, BBG has bottomed out and is turning the corner. These analysts are now just jumping on the band wagon of criticism. It has been mentioned several times on this forum that 'the analysts are talking about lower EBITDA but not mentioning how BBG has substantially reduced it's debt'.

BBG hasn't been this good value for... well ever. Its share price is very low, its mkt cap is still very low. It has new management, less debt, and TPG, a bargain hunter, made a much higher offer not so long ago.

I was happy to read this article and see that management is not in the panicking stage of selling and staying the course. For the moment, I will stay the course with them.