Billabong requested a trading halt of its stock today in Australia after a report in the Australian Financial Review said TPG was considering withdrawing its offer to acquire Billabong.
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As a result of the story, which cited unnamed sources, Billabong’s stock price fell 18% and trading in the stock was twice the normal volume.
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Billabong also put out a press release saying that TPG has confirmed to Billabong that it has not withdrawn from the sale process. TPG has expressed concerns in relation to some issues with the company during its ongoing due diligence process, but discussions about those issues are continuing, Billabong said.
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In the release, Billabong reiterated previous statements that there is no guarantee that a sale will come out of the process or that the board will approve any final sale proposal.
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The Australian Financial Review also said it its story, again citing unnamed sources close to the discussion, that TPG is concerned about the reliability of Billabong’s medium-term earnings forecasts and about the health of the core Billabong brand.
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TPG has offered $1.45 per share for the company, about US $710 million. The due diligence process is expected to wrap up this month.
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Billabong owns a stable of strong industry brands, including RVCA.
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