Troubled surfwear retailer Billabong has taken its latest takeover offer to the next step, allowing former board member Paul Naude and his financial backers to examine its books.
The former Billabong director and president of its American business has made a $527 million takeover offer for the retailer, as part of a consortium including New-York based private equity group Sycamore Partners and Bank of America Merrill Lynch.
Billabong on Monday said its board had reviewed Mr Naude's proposal and decided to allow his consortium to conduct due diligence on the company.
The due diligence process is expected to take up to six weeks.
The company has stressed its approval of due diligence is not a guarantee Mr Naude's offer will be successful.
"The board of Billabong reiterates that there is no guarantee that, following a period of due diligence by the consortium, an acceptable binding proposal will be forthcoming," Billabong said in a statement.
It is the fifth takeover offer made for Billabong in 2012, and the lowest.
Private equity firms TPG Private Equity and Bain Capital each withdrew their takeover bids for Billabong, made earlier in 2012, after being granted due diligence.
Mr Naude has offered $1.10 for each Billabong share.
The shares closed half a cent higher at 83 cents on Monday.
Billabong shares plummeted earlier in December when the company again cut its forecasts for full year earnings, due to slower-than-expected sales in October and November.
Billabong has also raised the possibility of taking more impairments on the value of some of its businesses in the current financial year.