"BAIN Capital spent two weeks inside the Billabong tent looking at the surf and leisure wear business before deciding the risk-reward equation on a complicated restructuring was too tight.
The original suitor, private equity group TPG, is still doing due diligence on a possible bid at $1.45 but there's no prospect of an auction now that Bain is gone, and Billabong shares did well to lose only 10.5¢ to $1.34 yesterday. They were at $1.27 before Bain's late arrival.
Billabong will be restructured and simplified by whoever runs it. It has too many brands, too many stores, and a fragmented distribution network.
This is TPG's second run at Billabong, and it has done its homework. The board has said its indicative price of $1.45 a share doesn't fully value a change in control - but with Bain gone, a modest sweetener would almost certainly win the board's support and win TPG the prize, and the intricate reconstruction job."
