Billabong shares have taken another hit after one of the two private equity companies vying to take it over pulled its bid off the table.
In early September the surfwear retailer revealed that it had received a second takeover offer from an unnamed private equity firm, just weeks after private equity firm TPG launched its latest bid.
But on Thursday Billabong said the unnamed company, rumoured to be either Bain Capital or KKR, had walked away.
Billabong shares sank 10.5 cents, or 7.3 per cent, to close at $1.34.
IG Markets analyst Cameron Peacock said the share price drop indicated shareholders were disappointed the second takeover offer had been pulled off the table.
"They are a struggling retailer," he said.
"As a shareholder the only reason you would have been comfortable holding this stock was because it was under a takeover offer.
"I'm surprised it is only down seven per cent."
Both takeover offers valued Billabong at $694.5 million, or $1.45 per share.
Billabong had said that both offers failed to reflect the fundamental value of the company.
But it began a formal process to evaluate whether a higher takeover offer could be secured.
TPG remains in discussions with Billabong.
"The board of Billabong reiterates there is no guarantee that, following this formal process, a transaction will be agreed or that the board will recommend any proposal," the company said.