Billabong: The hunter getting hunted
It's getting to the pointy end of the competition at the Australian Open of Surfing, sponsored by Billabong. Likewise, things are getting awfully prickly for Billabong in the marketplace.
Trading in Billabong was halted on the ASX yesterday as talk of an impending takeover spread. Since their grandiose retail expansion plan failed Billabong has been a shot duck, at the mercy of market whims and floundering within sight of larger, cashed-up predators. A takeover bid has long been suspected.
Texas Pacific Group (TPG) were the rumoured architect of the takeover bid and this was confirmed today. At $3 a share the takeover would've been worth $765 million. The typical pattern for private equity companies such as TPG is to buy businesses at depressed levels, rip the costs out, add some sales and then sell them off through a re-float on the stockmarket a few years later.
If TPG were successful it would be assumed that the branding and corporate staregy of Billabong would change markedly. Free of shareholder interests and obligations to the surf industry their strategy would be based solely upon short-term profitmaking. If such a takeover were to happen it's highly likely that events such as the Billabong Pro Tahiti and sponsorship of the current Australian Open of Surfing would be shed to reduce costs. Individual sponsorships would be put in jeopardy also.
Although their situation is grim Billabong had a few methods at their disposal to improve the balance sheets and counter a takeover. The most obvious being to sell some or all of the numerous brands they own, such as Nixon, RVCA, Kustom, Element and Von Zipper. Each brand has a carefully crafted cachet of cool and would do well in a sale.
The latest news is that this is the strategy Billabong have used. To stave off the purported takeover Billabong has sold part of it's interest in Nixon watches for $432 million. It's also announced other cost-cutting measures such as store closures. This move will result in the loss of 400 jobs, including 80 in Australia. All up, the company plans to close between 100-150 loss-making or under-performing stores.
STOP PRESS: Friday's takeover bid of Billabong by Texas Pacific Group, which ended with Billabong selling part of Nixon watches, isn't the end of the story. TPG's has formalised its bid and it's currently being assessed by Billabong. Read more here.
Comments
I was just in Lahaina, Maui and the store there was shuttered. Total tourist trap location and all the big brands on the block. It makes you wonder who the hell was steering the ship into insolvency - they were nuts.
Hock the small fry for half a billion dollars just to stay afloat.
How many surfers know that feeling?
Brilliant move, they only ever put 55 mil up front for Nixon.
This sale has net them ~150 mil, plus they keep half Nixon for free.
what a crack up, half a billion dollar deal vs 20 twits on a hamster wheel.
meanwhile WTI sits at 102 and Brent 120+ . in a recession.
Who was steering the ship into insolvency,
the major shareholders benefit,tax benefits losses cash payouts, options, contracts that pay them a lump sum every year for 5 years or at least dividends so the get the ulimate benefit just the best way to extract money from a loss making business filled to the gills with debt
if you were dumb enough to buy bbg rest in the knowledge that the executives & major shareholders will win from restructure you will not
SCUMBAGS= billabong executives & major shareholders cashing out
FINISHED as a brand including their minor labels, gone to the dust bin, billabong in BIG W TARGET by xmas
Nike pro tour next year maybe DEMTEL or the the home shopping network
maybe a reality series who wants to be a pro surfer,
Quiksilver & billabong created this scenario name any world champion without there sponsoreships
i look forward to a shake up when a young surfer sponsored by a local shaper has a REAL CHANCE in a corporate event
I am by no means a business expert but common sense tells me there is nobody of sound mind that would think nixon is worth four hundred odd million dollars in todays economic climate.
Something just seems a bit fishy to me. I could think of plenty of sensible things to do with that sort of money and surf shop watches certainly doesn't register.
I cant get my head around that claimed value.
Cum Satins, you little puppy you,
Your steaming pile of a clue is in the first line of your entry,
you are not a business expert.
Drive thru.
@SS,
'I cant get my head around that claimed value'
It seems pretty damn excessive, doesn't it? I wonder if the value is artificially inflated somehow and not an actual amount. Any sharemarket boffins know? If that amount is genuine that would put the total value of Nixon around a billion dollars, and yeah, that just seems too much for a li'l ol' watch company.
And no Roller, I'm not a business expert either. Just wondering is all. Any solid info one way or the other would be appreciated.
me no business expert either......with the world watching over bbong this weekend,buy bong shares asap mon morn......midday a rise ,end of week will be very interesting. i predict large gains---very large...another shrewd bong move mid next week......i an not a stock broker..just a dumb surfer who retired at 40...
my definition of large gain is a share price rise of $2 +
Stu,
Financials and other factors aside, don;t you think that the web address of Nixon watches alone is worth a bloody mint?
And i nominate those boys and girls responsible for it as alltime geniuses.
NixonNow.com....
Capitalism 2.0!
stu..maybe your numbers re Nixon are a bit much...this is what SMH story says today.
.Billabong said the deal gave Nixon an enterprise value of $US464 million ($434 million), and would result in net proceeds to Billabong of about $US285 million, which would be used to pay down debt.
Read more: http://www.smh.com.au/business/billabong-defends-move-to-shun-bid-from-t...
As well as Bong getting $US285 million it was only about half cash and the rest was debt/borrowings backed by the new VC's (because Bong could not borrow) and Bong are still at risk of breaching debt covenants which are over $300 million, so this half sale helps but they are still far from safe and may still be taken over by TPG or the like.
Watches are massive profits for surf companies as they only pay a few bucks (under $20) for watches they sell for $200- $500 and when you sell to global markets surf/skate/snow and youth fashion ...welll you do the numbers, it is soooo profitable ,especially with Bong going direct net selling and shutting expensive retail.
Victor, good luck spending ya money on Monday mate...about as safe as as pokies right now, only have a crack if ya got plenty to throw around and can afford to loose it or not get a dividend
Stu, might have been a good idea to get a better handle on the figures before you write an article.
BBG bought Nixon in 2006 for a down payment of 55 mil, plus a deferred payment of 76 mil due this year, total cost 120 mil.
They have just sold 51.5% of Nixon for 285 mil. The Nixon enterprise value being 464 mil, not 1 billion.
Expensive, fucken oath, but thats all academic now cos its money in the bank for BBG.
Think of it as a property you bought in 2006, for 120k. You sub divided the block, sold roughly half for 285k, and kept the other half.
that's one sweet deal.
Roller you should know that business expertise and common sense dont necessarily go hand in hand and we won't even talk about integrity.
meanwhile, whilst everyone was enthralled in the "shitty" BBG deal...
Pacific Brands posted a 365 mil half year LOSS yesterday.
scum stains, Sidthefish,..
You boys are right, compared to their original cost, and how they still retain a slice of NixonNow, even with all of their financial predicaments, someone at BBG struck a rather sweet deal.
here will be winners. There will be losers.... And nothing has changed since the begging of time mate. the business world is and always will be risky.
but, no matter what, folks will drink. and although i came by my shares thru a the spin-off from the recently completed buyout of The Foster Group, by SABMiller, not a shabby investment to buy a bit of Treasury Wines.
'Stu, might have been a good idea to get a better handle on the figures before you write an article.'
Fairies nuts, Sid. In my defence the figures were the least important issue. I'm much more concerned with the takeover bid, the state of Billabong, and what the wider repercussions to the surf industry are (i.e event and athlete sponsorships).
stu, a proper grip on the deals' figures will answer those questions as mostly null and void.
If TPG want to pursue a buyout they will now have to reassess their bid.
Billabong is now anything but snookered, I believe they are comfortably leveraged against their Revs, consequently TPG can go stick their opportunistic $3 raid where the sun don't shine.
Stunet:
"'I cant get my head around that claimed value'
It seems pretty damn excessive, doesn't it? I wonder if the value is artificially inflated somehow and not an actual amount. Any sharemarket boffins know?"
Mark to unicorn, mate. It's the new normal.
Goodness help us all if the market (ie, all of us) were permitted to actually value items ourselves through our own human action.
Oh, and to sidthefish from other BBG blog, TD and ZH do rock, but for how much longer? You know the throwaway line...
Billabong’s demise is the true end of post-modernism in surfing. We need not engage the debate any longer – the jig is up.
The party’s over.
Shit has hit the fan. We can now look at Baudrillard’s theories of the simulacra as “quaintâ€, much as we look at Rousseau’s notion of the Noble Savage – a product of that time, and grossly ignorant. The demise of Billabong, Karma induced, defies identity, it defies any originary inquest, it is completely technological and not only exists only within a media sphere, but it exists because of the media-sphere.
Yes. Me. Yes. You… though most of you don’t voice your opinions where they are actually heard.
And the 1% of surfing society that surrounds this Spectacle? Far more rotted and pathetic than anything Debord could have imagined.
12 year old child soldiers are commanded to murder their parents and brothers and sisters in order for local warlords to get a stronger lock on the extraction of tantalite; and from that tantalite come the necessary parts of the cellphone so that a couple of chimps with stickers on their boards can wiggle and waggle in front of a few thousand clueless rednecks in the stands, completely oblivious of the murderous horror that their entire lifestyle, interests, and practices are predicated upon.
This is the final nail in the coffin of Surfing’s post-modernism era. There is no going back. We have sailed over the cliff of modernity, and our post-modern legs are tired of pretending we’re still running in the air… just like Wile E. Coyote… and now we’re on that long hysterical drop to the bottom of civilization’s canyon.
Welcome. To. Now.
Sorry to blow the whole Spiccoliotic "See No Evil" vibe...
The "hero of poor Billabong," Steve Shearer, could have used a few years in the School of Hard Knocks... meaning... basic fucking literary skills and not just retorting with cliched Shakespearean MacBeth cripes and the latest Russian Philospher du-jour's Googlable quotes.
Just because you read their books (what average surfer in the 99% hasn't?), doesn't make you a genius. It merely elevates your struggling IQ slightly above the child who can read Dr. Suess... or, a genius among the 1% in The Industry... and a fucking modern day literary miracle in po-dunk Lennox "we love the ASP but fuck Rip Curl Search" Head.
Bring it big shot toilet cleaner.
It helps to actually learn.
Really got up ya nose that little Twitter stunt didn't it Brew?
heh heh heh.
Hope you handed in your crackberry so no more kiddies died in the Congo.
Remember why America got it's arse handed to it in 'Nam.
No matter how much napalm you use, it's hearts and minds.
Slow learner for a man with such a big vocab.
There he goes again, mr pilled up and drunk rottkamp... who knows funny little spooky stories, and his checks for writing 'em written by multinational corporations....
Yup, as with the business of surfing, there have been plenty of film and production companies that have come and gone, yet Hollywood and movie making is still going strong.
Even if Billabong was to fold up shop completely, (which they wont. just a semi simple restructuring of assets vs liabilities)... so it will it be in the surf entertainment biz, it ain't going away time during your lifetime, 'ya kook.
Many a band and record company have come and gone..... Still, the music industry is more alive and well. And will be for generations to come.
On this subject of something defunct forever and ever, rottkamp...
your surfing related blog site..... Done and dusted.
And how it happened? The content was shite. Nothing but rehashed retreads from Lewis Samules.
Your end? It came when, unlike the boys running Swellnet.com/au, YOU edited and banned people who disagreed with you in the comment section,... Kook.
Roller,
You were the only person ever banned. And EVERYONE was told the reason why... it had nothing to with what you said.
As for why I stopped, after a year if telling you I would, read my last post. Pretty much explains everything.
Then again, you chose not to believe anything I said on my blog was true EXCEPT for the part about booze and drugs. How convenient.
I'm sure everyone loves hearing you repeat yourself in every single comment.
Oh we have been marginalised?
B.R.E.W. @Rottmouth
People who think I am trying to win over hearts & minds in The Surf Industry have completely missed the point. Fuck You & All That You Love!
I look forward to the Clifton Evers, Cori Schumacher and Blasphemy rottmouth Love Child.
or will it be the Fuck You & All That You Love Child. ?
Sid,
We shall call our baby by its rightful name: Your Brain Times Infinity.
So shall it be written. So shall it be dung.
Still waiting for Shearer to explain this "Twitter stunt" he pulled. It was so stuningly amazing that no one noticed or cared... apparently. I can tell you right now, no in in The Industry is follwing him on a private list because they don't feel threatened by him.
He's a good little Shep.
you'd never know who's johnny who in the twittersphere.
Rottkamp, back in the day, before your blog site blew-up, due to the fact that all you did was rework what had already been blogged by others, you know, similar to your shite concerning vampires?... nothing but modern day reconstituted crap circa 1940, you told EVERYONE that you would never ban ANYONE from your blog...... And that everyone else needed to do was step up their game.....
What happened soon after?... You begin banning anyone who had a different viewpoint than your shithole shithole!
And you site shut the doors... Producing one more rottkamp EPIC FAIL!
Heh.
"Billabong’s demise is the true end of post-modernism in surfing. We need not engage the debate any longer – the jig is up"... "The party’s over".
-Rottkamp
2/19/2012.
Yea?... The Party, the multi track entertainment event of the summer, skate, surf, and top shelf musical acts, THE modern day event going down in Oz, is on and strong at Manly all week long!
Watch. Old rottkamp's predictions will once again having him look like a farking fool... Producing one more in a long list of.... Foot. Mouth. Epic Fail!
Booyah!
Roller,
I haven't watched a single second of The AOS. Twitter says it all: "1 foot and blown out," ""another bullshit comp," "crowds are weak," etc... If these mass comps were so successful, then why are ALL the surf companies suffering... from top to bottom? Why is Bong... the SINGLE best positioned company in Big Surfing, the one being hit hardest this month?
You always talk about Music, Movies, etc... restructing and continuing on. Even if Corpo's come and go.
If surfing competitions dissapeared tomorrow, it wouldn't register on the ESPN radar. Not even a little bit. Minor sports like "competitive surfing" aren't even as p[opular as "Curling."
You think "competitive surfing," which has only existed in a less than miniscule media market for thirty years will just continue to thrive as if they are Basketball, Football or Synchronized Swimming?
Bullshit.
The gig is up.
Surfing's popularity has been dwindling worldwide since "Point Break" came out.
It's no rebel sport. It's a conformist, rules-laden, conflict of interest blacketed, mess that no major sponsor will touch.
Bong pulled the oldest trick in the book with TGP, a company that was never going to buy them. Drum up interest in your comany so you can sell your assets for a few bucks more.
It's been done a million times. And most of the time... it's a failure in the long run. Especially in recent history.
Tell me Roller:
How much stock do YOU own in ANY surf brand?
Answer that question before you speak another word here.
None, Rottkamp. At this time I own none.
But, i always love to buy things cheap!...
Now, back to the event. Events like the Aussie World Cup of Surfing are not geared towards old fuks like you. But, you must enjoy looking like a douchenozzle, as it is absolutely choka block with people. And the stake and music events are over the top alltime!
And even if Billabong filed BK, and every single person who works there were arrested and jailed for 100 years, surfing would go on and on..... example? Professional poker tour had a serious shitstorm, when THE major sponno, Full Tilt Poker, had some uhh serious problems?....
"On September 20, 2011, The U.S. Justice Department accused Full Tilt of defrauding poker players out of more than $300 million. The U.S. Attorney in the Southern District of New York filed a motion to amend an earlier civil complaint to allege that Chris Ferguson, Howard Lederer and two other directors for Full Tilt operated what the Justice Department says was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players"...
http://en.wikipedia.org/wiki/Full_Tilt_Poker
And yet, the pro poker tour goes on even stronger than before.
So, as to professional surfing ending in the next 5 or ten years?... it is one more in a long list of your classic epic fails!
So yea, are you always rolling around town acting like a major stuppa? Or do you just play one on surf related message boards?
BOOYAH!
Roller,
You love them so much, they run by such smart people, they run such strategically smart events at such consumer driven markets that still think surfing is cool, and they completely control the weakest Sanctioned Body that exists in pro sports (The ASP)...
And yet...
Yet even you, dear Roller, claim you won't buy their stock?
Booyah to the Cash-Hog!
Put up or shut up Roller.
You just flapping wind if you wouldn't back them yourselves with your own money.
Unlike you, I put my money where Steve Shearer WISHES he could put his heart... into REAL charitues that aren't shams (like Sea Shepherd and Surfrider), that are actually funelling real $$ to real needs.
So shut your "set to repeat pie-hole" unless you have something new to say.
Like most "financial advisors" who surf Bolsa Chica their whole life... your knowledge and wisdom of the markets runs thinner than your alibi for Insider Trading (whew... narrow miss this summer, eh!)
If the Surf Industry was so "on the brink" as you've stated for at least three years, with all their cool bands, and clownshow sideacts, were so goddam successful then why the fuck aren't you retired in the Maldives, New Zealand, or the Caribbean by now? Why are you struggling to longboard 2 foot slop everyday? Why can't you ever address anything besides my supposed drinking and drugs?
Oh yeah... you are The ROLLER.
Keep blathering on about all your financial knowledge. I know where you live and surf everyday. If you knew anything... you'd have been long gone years ago, like anyone else who made money in the investment market.
At least Steve Shearer has the grace to accept the fact that he's a fucking hillbilly redneck scooting as far out onto the limb of Cartel Support as possible to grab enough crumbs to feed his family.
At least I have the decency to realize, as was stated earlier, that I barely have the strangth to light a match on my own, but with just a few people: @FSU_EDU @V_For_Vanguard @SeamanStainz @FrankiePells @LiquornChicken and a host of others... we have lit The Fire that has kindles the current mild responses from Media 1.0 about a month late (whenever their periodicals and blogs come out).
You want to take me on in real time.
You know where to find me.
And tomorrow I get my cast off and will transistion to a brace... no more typos. Hallelujah!
Bon Voyage Swellnet.
This is it.
The end. For reals. I had planned it for later next month. But the tide's turned too fast in my favor.
Remember this:
Bong "sold" Nixon only as a joint venture to a fellow South African Company which used to be Lehman Brothers. This gives Nixon ALL leverage over anything Bong wishes to do in the future.
So it was written eons ago... so it is done.
Surfing is going nowhere but down as an Industry.
And anyone who bleeds surfing from their soul knows this is a good thing.
This is necessary.
Fuck the world and their corporatization of everything. Surfing was never meant to be a real sport, let alone an Olympic farce.
It's nothing more than a man riding a plank on the best wave he can find.
You want to see what's NOW?
Then go to NOW.
This is yesterday's news.
All of it.
Stu's interview was a pompous ode to everything Old Surf Media stood for.
Good riddance, sheep.
No Rotty, good riddance to you ya dick brain!
peace be with you rotty, you fucking twisted unit.
Later, Brewser. If you ever need your words projected to a larger audience, well, you know where to find us.
Thank fuck! Typical American, won't fight on his own shores but has to take it elsewhere. Meanwhile Surfline, Surfer.com, Surfing.com, keep raking the industry bazookas and Blasphemy Rotmouth leaves them alone.
Thank goodness for that! Now we might see surfing comments on surfing threads for a change.
Mind you, it's been a bit like watching a car wreck - can't take your eyes away.
Rotty gone?
Back in less than a week.
Guarans.
I'm sorry to think like this but, I think he will be back, just like the bad smell that he is! Hope I'm wrong but with mentally disturbed people such as Rotty, he'll come back to where he was getting some attention as he probably doesn't get any at home.
Oh yeah, hubris never goes out of style eh Rotty?
The lady doth protest too much.
Anyway...how do you like young Banting's performance, eh? Bloody greedy. Bloody good, but.
Rotty, I hope you find love.
And when you get that cast off, do yourself a favour and go for a surf.
It's fun.
I admit I watched all of 10 minutes of AOS. (Sadly great surf/swell/conditions don't have 'waiting-periods')
The most impressive thing I saw, was Mitt Bintang didn't get 'chaired' up the beach!
What ever happened to the 'Ozzie' National Pride?
Someone really blew it!
Maybe all Australia?
Dear Rottkamp,
I surf 5 days a week. And have the opportunity to surf 7 days a week, but tend to leave the weekends to others. I have been lucky enough in my business to be able to surf anywhere on the planet i care to. Any time i want. Surf is where one finds it. I do not own a longboard, or a SUP. You have seen the vid of the guy who shapes my crafts.... MB. And he does every step, shapes, color, artwork, makes the fins, glasses, sands, and finishes... custom boards from start to finish.
As to the profession of surfing, if it all ended tonite, i would not care. But, i and most everyone else, (the 99%), know that it will to end in our lifetimes..... So go on and pound your dome against the wall in frustration, as more and more multinational corporations come into the mix, and surfing keeps progressing from here.
You? You've made the chose to mix prescription drugs with your hard alcohol addictions, so it's quite easy to see why you are a neggie on juts about everything except your next fix...
Get help. Seriously. Get Help!....
We on message boards can take it. But Your family does not deserve to have a pilled up douchenozzle for a father/husband/brother/son/son-in-law.
And if you do find the right help, maybe one day you too will actually surf again.
That is all.
How many people actually get rich, or well-off from surfing?
Follow in their footsteps?
I have to agree with ROTT on one point. Surfing wasn't meant/ shouldn't be about money.
It has become both a profession and a pastime.
But, 'greed' prevails and always will. Sometimes it is a good thing!?
Our boards wouldn't be as good without the 'industry' ? (maybe I should say 'cheap' - ?)
And where would we be without rash guards and traction pads?
Loved Surf Into The Summer though...
And Lord Rotmouth name dropping - just beautiful...
'And anyone who bleeds surfing from their soul knows this is a good thing.' Says the self-confessed kook who mistakes Wayne Lynch for Wes Laine.
What sport are you playing next summer, champ? Racquetball?
If BBG were to sink...or at least if they were to hit hard times, the ASP is going to find itself with a lot of slack licenses. Nike has been touted as a pro surf saviour but what have they done? Promoted 'QS comps on urban beaches out of surf season. Anyone who think they've got pro surfing's best interest - at least from a spectators POV - at heart is kidding themselves. It's business front and centre.
Red Bull will never sponsor an event, neither will Monster. They both do 'uniques': events or happenings that can't be repeated, and, most importantly, they have a monopoly over (i.e they get ALL the branding and exposure). They will never share exposure with the ASP, or Fuel or any of the many presenting sponsors. That model has worked well for both of them - why change it?
So who's left? Quik, who are in their own trouble, and Rip Curl who only look for tax breaks and govt handouts. Volcom have taken their first step but their allegiance isn't proven.
I get the feeling we're going to see a lot more urban surf contests in the near future.
That is some bloody good observations atticus, and I think you are pretty well on the money. The next 12 to 18 months are going to be pretty interesting to watch how things unfold.
As much as it pains me to say this, but perhaps out of all the ramblings, one of Rottenguts messages MAY have a small element of truth................Oh shit, did I actually say that.
Prolly right Atticus but Monster were all over the Chopes comp in conjunction with Bong so they do have history as a corp who will share toys in the sandpit.
I reckon Quik will pick up G-land next year due to it's proximity to Asian markets and chance to rebuild the imploded core.
Yeah you're right, Freeride. I just looked at the Billabong Pro Tahiti website and Monster are on there. Still, they do take a different tack in that don't do any trad. marketing such as print and project themselves differently to the other license holders. I think Monster is simply too progressive and leftfield to ever take on an ASP license.
Would love to see Quik pick up G'land. Why don't the ASP put out a press release to gauge our interest??
ASX ANNOUNCEMENT
PROPOSAL RECEIVED
GOLD COAST, 20 February, 2012: The Board of Directors of Billabong announces that, before market opening today, it received a non-binding, indicative proposal from TPG Capital to acquire all of the shares in the company for $3.00 cash per share by way of a Scheme of Arrangement. The proposal is subject to due diligence, subject to finance and conditional on a number of other matters, but it does not preclude the Nixon transaction announced on Friday 17 February 2012.
The Board of Billabong will consider the proposal and advise shareholders of its views in due course. In the meantime, Billabong shareholders do not need to take any action in response to the proposal.
Billabong has appointed Goldman Sachs as financial advisors and Allens Arthur Robinson as legal advisors.
MARIA MANNING
COMPANY SECRETARY
I dunno if Monster are all that different. They seem to be dipping their toe into the water with surfing. Their signage was all over the Aus Open at Manly so they were definitely a fairly big sponsor there. So they're sharing already.
Traditionally they aligned themselves purely with motorsport - motocross, rally, V8s etc. I don't see that as being progressive or leftfield in anyway - V8 supercars is a hardly progressive marketing move and aimed right at the heart of the mainstream bogan target market - nothing leftfield there.
Likewise RedBull's most prominent sponsorship is Formula 1.
I think it's more of a numbers game for them. Until surfing generates more of an audience, they'll stay in the background. But some of the BIG contests (Pipe, Chopes, Fiji) might be right up their alley as the exposure increases.
can someone ring up TPG and tell 'em they're dreaming.
I thought my interest would wane now that B-R disenfranchised himself from Swellnet, but I'm loving keeping tabs on the regular updates on sidthefish's avatars. Love the latest one, Sid.
Lolo,
They're different to the traditional ASP sponsors is the point I was attempting to make. Leftfield probably wasn't the correct term to use - heaven knows a company that sponsors monster truck gigs isn't prone to elevated thought. I reckon they're progressive in that they have a fluid marketing scope and to be tied to a three-year license deal with the ASP wouldn't fit that model.
I second that, Sid. TPG's offer was roundly rebuffed - what's changed?
A company that was worth $10 just over a year ago with a swag of 'cool' brands at its disposal being priced at just $3? Seems unlikely to me...
More likely to think there was some funny business being played by TPG and BBG.
Atticus -"Would love to see Quik pick up G'land. Why don't the ASP put out a press release to gauge our interest??"
They did about 8 to 12 months ago. I even put it in the forums but I guess they didn't get enough interest shown.
Happy to see Fiji in but surprised that G-land wasn't included.
Quik couldn't afford NYC and G-Land.
They've shitcanned NYC and with a years breathing space (in which time they will hope for improving trading condys) they could pick up G-land in 2013.
Just an old Skool bait and switch really.
TPG bid got pantsed by the Nixon deal.
Todays bid announcement was just a matter of course and compliance.
the Nixon deal was a lot smarter and much less slimey than Quiksilvers' Rhone deal.
and people who, they know who they are, claim current trading conditions and share prices are somehow surfing specific, should pull their head out of their bungholes.
Pacific Brands posted 365 mil half year LOSS on friday. Didn't see Freddo Pawle squeeling that socks and jocks are now uncool, as he does with Billabong.
Yeah, but in Fred's defence I believe he was trying to explain why the surf industry has taken a tumble. After all, it's not like every company is posting losses. Surfing is no longer inherently 'cool' as it was for many years. The companies traded on that cachet but the whims of fashion shifted and their sharemarket fates with them. Would you argue that surfing fashion is as cutting edge or pervasive as it was in the 80's or 90's?
Of course that's not going to be the only reason for their current situation, the overarching economic climate can't be ignored, but further to FP's theory are myriad start up brands and 'clean skin' brands started by the big guys. Read VSTR.
I think an attempt to explain things from a consumers perspective is fair enough. Pacific Brands may well have it's own specific reasons as commented on by a socks and jocks journalist out there somewhere.
Sid, I agree that, generally speaking, current retail trading conditions are pretty lousy for brick and mortar retailers around the world, especially here, in Europe and North America.
But Bong's problems run far deeper, IMHO. And a few good stock pickers' opinions, too.
So, whilst '"The Board of Billabong will consider the [TPC] proposal and advise shareholders of its views in due course," Billabong said in a prepared statement, Bong's board, though, may not necessarily have the support of major shareholders. John Murray, Managing Director, Perennial Value said on Friday: "We have very little confidence in the Board and senior management and change needs to happen at that level.'
In other words, the Nixon deal may not be enough to save the Bong board's bacon.
This has a long way to go yet....
The uncoolest thing going is the same thing killing household budgets, retailing in general, governments and sovereign nations.
Its DEBT man.
Debt is OK so long as your strategy has legs enough to service it.
Going full-tilt into so-called "vertical integration" without sufficient management head-space or grey matter, let alone a Plan B or a parachute was dumb, dumb, dumb.
This was an 'All or Nothing' plan. If the definition of 'Nothing' is Billabong-branded goods being sold by discount department stores within 18 months, Nothing is looking the more likely.
definitely dumb dumb dumb. They should have learnt from watching Quik.
yeah, heads should roll, but methinks they'll pull through fine.
It's less monumental fuck up than Rio/Alcan, Fosters/Southcorp, Quiksilver/Rossignol, Oxiana/Zinifex, News Ltd/myspace... the list goes on.
ya know, cut off a few limbs, smash the debt... and play on.
Oh, I'm not at all saying that Bong will go under - far from it; it owes far too much to far too many for that. What I AM saying that Bong has built itself a nasty hamster wheel. The need to sustain and grow sales volume will see brand cred and cachet that took years to build completely buggered and flattened within a matter of months.
Someone as conflicted as RKS could see the need (opportunity) for authenticity, substance and form as function.
Yet what were Bong's designers, product managers and other creatives doing for the past 4 years? Answer: feeding the hungry beast.
Gordon, as the adage says, 'be careful what you wish for'.
internet playing up...did bong hit $2.90 today ?
vic, yep, hit 2.92, closed 2.83.
I dunno whaaat, half year revs ~850 mil, not a bad suck of the sav in the current trading climate and with AU$ @ 1.07.
Revs are pretty damn good, I reckon the probs sit on the liability (debt) side of the ledger. That debt is now ~400 mil...loose a few shops, loose a few revs, sure...but play on.
yeah its a fuck up, but ya know in business or investing we've all zigged when we shoulda zagged, or zagged when we shoulda zigged.
Sid, I don't like the direction of Bong's gross margin in sales nor, particularly, its EBITDA. Anyone can give stock away....
FY 10/11 10/09
EBITDA $94.6 $123.5 -($23.4)
EBITDA Margin 11.3% 17.1%
... and Bong has a lot of stock to give.
FY 10/11 09/10
Inventory $320.6 $221.2 +44.9
Martin Riggs: I should have cut the red wire.
Roger Murtaugh: You did cut the red wire.
Martin Riggs: No, I didn’t, I cut the blue wire.
Roger Murtaugh: That’s what I meant. We should have waited for the bomb squad!
-Lethal Weapon, 1987
Retail is all things. Always. And in the overall picture things are not as bad as it seems.
Still, with Billabong being an outlier to the rest of retailing sector, someone's to blame for their bullshite performance.
Someone has the smell of bong juice all over them.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&instty...
Ian Verrender, Fairfax econobloke and surfer to boot, has an article in the SMH about the changing nature of retail and why the big companies, including Billabong, are suffering:
http://www.smh.com.au/business/adapt-or-face-extinction-20120220-1tjqa.html
"econobloke" ...
I like that.
I'm doing all my shopping online. Who needs to go to a mall?
good article. Balanced and bigger picture.
J-Bay gorrrrrn from the WCT. Now a WQS event....
The strings are tightening.
Gawwwwwd!! I sense the bunny gloating as I write. No doubt claiming supranatural prescience etc, ad nauseum. Which may well be the case but who would know? I couldn't understand most of what the bastard had to say. Which was plenty, as those who suffered through it all well know.
But this is not the end of pro-surfing, that's for sure.
Nor is it the result of any legal action by AI's estate.
Just the logical outcome of illogical business decisions.
wouldn't hurt for Co's to step back from Pro Surfing for a awhile.
it's not like most of their customers surf.
Do promo online, a'la Billabong XL, and extend marketing into mainstream avenues.
give all the whinging rottencramps what they want... nothing...
let them eat cake.
@sid, 99% of the people who watch films or DVDs don't make folms and DVDs. 99% of the people who watch sports don't play sports. the majority of people who go to concerts, or purchase music are not musicians. 99.9% of the people who watch porn are not pornographers.
and guarans ballbearins, old rottkamp will still be in the closet, tuned in to each and every WCT event!
rolls, true.
but there is more than one way to fillet a fish.
Billabong have rejected TPG's $3 a share offer and are asking for a higher offer.
This in turn has boosted them above the $3 offering with a peak seen this morning at $3.09. It has settled back to $3.02 but it will be interesting to see if TPG come back with a higher bid..
Here's some quotes from this article.. www.businessweek.com/news/2012-02-26/australian-n-z-stocks-aquarius-bill...
"Billabong International Ltd. (BBG AU) gained 5.2 percent to A$3.06 after Australia’s largest surf-wear company rejected a A$765 million takeover proposal from buyout firm TPG Capital and said talks continue to try to get a higher offer."
TPG will go as high as $3.50 share price...divide up the company and pick up a cool 200 mill......
anything under 5, tell 'em they're dreaming.
By my calculations, it's six weeks to the day that BBG announced Naude's proposal. Time is running out for him to show the dough. Or pack up his desk.
Per the article title,...
Hunted?
Punted.
Yep, been keenly eyeing the business pages waiting for an update. It's been a protracted story for the folk at Billabong, and also anyone else following it. Be kinda glad when it's over, it's getting awfully tedious.
The market is getting very pessimistic.
http://www.theage.com.au/business/billabong-slumps-to-new-low-on-takeove...
One share now worth less than a Flake Cone at Maccas!
If they are at $0.69 cents. That puts the entire valuation at $330 million....bargain!
Gidday the market has been very pessimistic for 5 years. Everything else, including why, is meaningless regarding Billabong, if trading its shares is the focus. The market dictates the price. If you think the market can't go lower, think Babcock and Brown in the first GFC. There's plenty of downside profit in Billabong yet.
Over 95% of people lose in the market. The reason is because of the same type of thinking that would believe that top surfers can excell at anything, simply because they are top surfers. The 'I am a successful X, share trading will be a cinch' disaster. Cannon fodder. Anyone of the tiny percent who have traded successfully, for a living, (and that means relying on trading alone to provide your salary) will use methods nothing like what the general consensus of trading is. Money management, based on 50/50 probability is paramount. Never go against the trend. All this other stuff is irrelevant. Not one so called 'expert' was calling sell when the GFC hit. Its hilarious. People still listen to them, oblivious and blind to their ineptness at trading. They would all be broke.
And don't confuse trading with investing...or gambling.
Thanks for that, Mr Buffet.
The reason I'm interested in what's going on with Bong is not that I'm into trading its or any other company's shares.
The real reason is that we could be seeing the end of an iconic business. Which would be tragic for all concerned, particular but not only its employees.
It's in significant breach of its banking covenants. If it remains publicly listed, it will have no real choice other than to try to raise further capital on the open market. Unlikely to be met with a warm reception.
Going into private hands is its best and probably only chance of long-term survival. I thought it was a done deal. But due diligence has now taken a helluva long time. Neither prospect seems to be falling over themselves to get in the first, real bid.
Not good.
So, if it remains publicly listed (ie takeovers don't eventuate) and can't raise any more capital, what kinds of scenarios would we be looking at? Is it as simple as one day they're here, the next they're gone? Or are there protracted downscaling measures that can be applied?
Ben, as an outsider looking in, it seems that the downscaling measures that can be applied are largely being applied.
As I understand it, though, there are still major restructuring issues required in the North American operations, particularly Canada, so further unpleasant medicine is still to come.
It all adds to shareholder discontent. Time is of the essence. Even if we agreed that Launa Inman's 5 year plan was the right one (which I don't - taking costs out, getting info systems sorted and reducing the range width are just parts of the piece. Where's the brilliant new product coming from? When?), she's going to be too busy fighting off the alligators to drain the swamp.
Private ownership takes the shareholder pressure indoors.
OK. But what if they don't achieve private ownership and can't raise any more capital? If Billabong are in significant danger of breaching its banking covenants, will their lenders simply wind them up?
Depends. Unlikely that those bankrolling BBG will put it to the sword -they would if they thought they'd get more for their security. But they're probably still thinking they'll get more with BBG still trading than not.
But they hold security.
Unsecured lenders (such as suppliers) are another thing altogether. They will not hesitate to stop supply if payments get pushed out or start getting sporadic.
Landlords will also get antsy - if rent is late, they'll jump quickly as they'll want to avoid arguments with suppliers about who has first dibs on stock. They'll just lock the doors and send in the bailiffs.
All the time this is happening, shareholders are either jumping up and down, or trying to dump the stock to cut their losses.
These are the alligators I referred to previously. Dealing with these short term problems cannot be avoided. But it takes management time and focus away from fixing the structural, long term problems.
Of which BBG has one or seven.
Very insightful, thanks whaaaat.
"Where's the brilliant new product coming from?"
Nail hit firmly on the head there whaaaat!
Gidday, its a pleasure whaaat. Like I said, no sudden pessimism at all. Just more money being made, in a market. Markets exist to make money. That's all. Just like lotteries, otherwise no tickets would be sold. Its been going on with Billabong for years.
All this speculation is funny. No one saw this plummet. Well actually, that's not true, I did. I was actually, really sincerely trying to help victor and anyone thinking of buying, instead of selling Billabong a while back, when he was thinking it such a great buy at 80 odd cents.
But, now all the experts will expertly discuss why the things they had no clue about happened. The world of fiction and jargon, dressed up to look like fact. Again and again. Puffed up budgies looking in the mirror. Its South Park material. Sells papers though.
It is sad that a defunct Billabong will cost a lot of really nice people their income, and drastically effect their lives. Billabong has wiped out many nice, Australian people that way already though, in the quest for profit. Its very common. In every field. Cheap labour. Genuine, expert, honest craftspeople bite the dust daily, because they can't work for peanuts, and don't have the buying power to even get the raw materials. Or the makeup to be so cunning and calculating. And that is sad.
But, back to Billabong, if you walk through a paddock full of shit, its bound to get on your feet.
Thermalben - shareholders can voluntary wind up the company as long as it's solvent. Then liquidators sell the assets off. s491 of the Corps Act.
This must be an attractive option to some - BBG sold 49% of Nixon to TPG for something like $400 million. BBG current market value is less than that figure alone. Sell the rest of Nixon, Lee, Wrangler, VZ etc. I haven't look at the 2012 books though, for diligence to take this long must mean more than a few skeletons.
True that, Crisp, but a members' wind-up must be passed by 75% of voting shareholders. That's a lot of votes. You don't see many of these for embattled coys.
@Uplift. I'm sure there's something for all of us in what you say but, yet again, I'm lost.
Berkshire Hathaway seems to do OK picking stocks. Prolly just lucky but.
Gidday whaaat. Simple. Toss in your job and go for it then. Just follow their picks.
I don't remember them being very verbal about the GFC before it happened? In fact, just the opposite. Brutal beatings galore. Buffetted was the term used. At least they had their income from all the whaaats on the books absorbing the blows and paying the bills. Keep that job.
Hey, but maybe I'm bullshitting. Maybe they saw the GFC a mile away, and all their investors cleaned up. Someone did. If so, if things I'm saying are bullshit, love to be corrected.
Just wake up tomorrow, log on to Berkshire Hathaway, top up their kitty, throw the board in, and away ya go!
Its like surfin whaaat. Head down and hook in, put that confidence to the test. Just put your head down, pull yourself over the edge, hook in, and Berkshire Hathawaaaaaaeeeeekkk....FFFFFFUUUUUUUUUUCCCCCCCKKKK!!!!!!!
Kaaafuckingkkkaaaaabooooooooooooooooooom!!!!!!!!!!! Fuck you wazza!
Shit!!! Did you see that! That poor fucker got hammered...shit is he coming up...where is the poor...he's fuck'n lost man!
He who started Bong down the path to its destruction....
Let's hope he gets jail time.
http://www.businessspectator.com.au/news/2013/3/25/retail/fraud-hearing-...
Something's up. Trading in BBG shares suspended pending a company announcement.
Yeah they supposedly had a board meeting over the weekend (according to an SMH article). Looks like the show's about to begin.
Jeebus, neither of the prospects are falling over each other to get in the first bid. So much for the deadline, eh? BBG is playing with a very weak hand.
http://www.businessspectator.com.au/news/2013/4/2/manufacturing/billabon...