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Billabong shareholders in limbo over bid


Billabong shareholders face an anxious wait for details of a potential $527 million takeover bid, which would be the beleaguered retailer's fifth this year.

Former director Paul Naude is believed to have made a $1.10-a-share takeover offer for Billabong.

The US-based businessman has also reportedly lined up New-York based Sycamore Partners as his equity partner in a leveraged buyout of the struggling surfwear company.

Billabong has yet to confirm or deny the reports but more than an hour after the first report was published on The Australian Financial Review's website on Monday morning, the company requested its shares be placed in a trading halt.

"The company is in a trading halt and will make an announcement at the appropriate time," a Billabong spokesman said.

Within minutes of the website report, Billabong shares soared seven per cent before being placed in a trading halt at 1211 AEDT.

The stock was 4.5 cents, or 4.8 per cent, higher at 98 cents when the halt began.

The trading halt will remain in place for two days, or until Billabong requests it be lifted.

City Index analyst Peter Esho said he would be surprised if Billabong accepted the latest offer, considering the company was now in better shape than it was a few months ago.

He said new chief executive Laura Inman seemed to be making progress with the company's turn around strategy, which included leveraging its brands, expanding its online business and globalising its supply chain.

"It's very unlikely that the board will accept a $1.10 when it has very little debt, it has made big promises around earnings, they've recruited a very well respected leader to drive the new strategy and they were talking down value at $1.45."

Mr Esho said for any offer to be credible it would need to be around $1.45-$1.50 a share.

Options XPress analyst Ben LeBrun said questions may be asked over the timing of Billabong request for a trading halt.

"It was very interesting that the shares were allowed to trade this morning given that it was pretty much reported in the press this morning the details of what the offer were," he said.

"Of course that hasn't been confirmed and the shares have been placed in a trading halt but potentially investors could get in ahead of time."

Billabong has already received - and rejected - four takeover offers during 2012.

The first two were in February when private equity firm TPG made unsuccessful bids of $776 million and $850 million.

TPG returned with a third offer of $694.5 million, or $1.45-a-share, in July.

Billabong said the offers undervalued the company, and three months later TPG withdrew the bid during the due diligence phase.

Bain Capital matched the $694.5 million offer in September but also withdrew its bid, only weeks later, during due diligence.