With private equity sent packing, Billabong International founder Gordon Merchant clearly has his eye on a possible restructure of the surfwear retailer.
The appointment of highly-respected former Target Australia boss Launa Inman as a “specialist retail consultant” comes as Billabong embarks on some soul-searching about its future strategy.
Fund managers, unimpressed by recent management presentations and the company’s short-term plan to fix its debt problems, have been quietly calling for some new blood at Billabong. They want a clearer indication of where the company’s long-term growth will come from.
Their wish was partially granted this morning although they would prefer to see a manager of Ms Inman’s calibre on the board rather than advising the company as a consultant.
Instead, they will have to make do with Super Retail Group director Sally Pitkin who has been appointed to the board.
Merchant, who has enlisted Greenhill Caliburn to advise him on the private equity approach and director Colette Paull, have used their combined 14.9 per cent stake to block the aspirations of private equity bidders, unless they are willing to go above $4 per share.
The company has ceased talks with TPG Capital.
The Financial Times was reporting this morning that Blackstone and KKR were considering joining the bidding race for Billabong although those private equity firms are understood to have been sniffing around for some time.
BBG Price at posting:
$2.37 Sentiment: LT Buy Disclosure: Held
