The head of Billabong's United States business is considering taking control of the surfwear company.
Paul Naude, Billabong's president in the Americas and a member of the company's board, is considering a potential leveraged buyout of the troubled retailer, Billabong said on Monday.
The company has given Mr Naude six weeks to discuss the potential takeover with financiers.
The move follows several failed takeover bids for Billabong by private equity firms.
"Mr Naude has advised that he is seeking to hold discussions with potential financiers, both debt and equity, to gain their support for a potential change of control transaction of Billabong," the company said in a statement.
The decision to pursue a potential takeover was not solicited by Billabong's board, the company said.
"Mr Naude has confirmed that there is no agreement, arrangement or understanding with any member of the board or Billabong's senior management team in regard to his proposal," it said.
"He is acting independently."
Mr Naude has stepped down from his positions with Billabong while he considers the possible deal.
He was appointed president of Billabong's American operations in September 1998, and established Billabong USA as a wholly-owned activity in North America.
He has been involved in the surfing industry since 1973 and has extensive experience in managing clothing brands.
Billabong has been the subject of several takeover offers from private equity firms.
It rejected TPG's first offer in 2012.
A second offer from TPG and a separate offer from another private equity firm were both withdrawn by the bidders after talks with the company.
Billabong made a loss of $275.6 million in the 2011/12 financial year, and has begun closing stores, cutting product lines and expanding its online presence in a bid to return to profitability.
Its shares soared on Monday, up 12 cents, or 16.2 per cent, at 85.75 cents at 1011 AEDT.