Yep sure do :)wish it would stay in a trading halt.US private...

Yep sure do :)wish it would stay in a trading halt.

US private equity funds Centerbridge Partners and Oaktree Capital have made a rival recapitalisation offer to Billabong that they say will save the company up to $143 million compared to the deal it has already agreed with rival US fund Altamont.

Centerbridge and Oaktree are offering to provide an interim bridge loan to refinance the $325 million bridge loan the company currently has with Altamont, at a 12 per cent interest rate and with a maturity of 31 March 2014, which would ultimately be replaced by a five-year term loan of the same size with a fixed rate of 13.5 per cent.

The deal would also require Billabong to sell $135 million worth of shares to Centerbridge and Oaktree at 36c per share, with a further $32.5 million worth of stock to be offered to existing shareholders, with the proceeds to be used to reduce the outstanding debt to $157.5 million.

The consortium said the new deal would save Billabong between $119m and $143m over 5 years, while the share sale would be priced at an 80 per cent premium to what Altamont has agreed to pay for Billabong stock.

The Centerbridge consortium said it had provided significant detail on its intended strategy and vision for Billabong at the request of the target company board, and had also lined up qualified candidates for the role of chief executive in the event that former Oakley chief executive Scott Olivet, who Altamont planned to install at Billabong, was unavailable.

Billabong agreed to a $325m refinancing deal with Altamont more than a month ago but Centerbridge and Oaktree subsequently complained to the Takeovers Panel that the agreement contained anti-competitive “lock-up” provisions designed to prevent a rival bidder from making a better offer to shareholders.

The Takeovers Panel this week upheld the Centerbridge consortium’s claim, forcing Altamont and Billabong to renegotiate the terms of the deal to remove a $65m break fee payable to Altamont in the event that Billabong pulled out of the agreement, and slashing interest rates payable on portions of the debt that Altamont plans to advance to Billabong.

In removing the break fees and other penalties for scrapping the deal, the Takeovers Panel opened the door for rival bidders to make an offer to Billabong.

Centerbridge and Oaktree levered themselves into negotiations with Billabong in July by buying up the $289m worth of debt the company owed to a consortium of banks. This debt has since been repaid with money borrowed from Altamont under a bridging loan while the companies finalise paperwork for the planned recapitalisation, which would require shareholder approval at a meeting expected to be held in October.

The Centerbridge consortium has said its refinancing deal could be executed in a similar timeframe to the Altamont deal.