Quiksilver denies rumors of possible Billabong merger

quik_homepage-carousel-3-defBeleaguered board sports group Quiksilver, which filed for bankruptcy a few weeks ago, has excluded the possibility of a merger with Australian competitor Billabong International.

The rumor was fueled after Oaktree Capital, which holds 18.7 percent of Billabong shares, is said to have helped refinance Quik through a deal worth $175 million.

Bankers won’t exclude possibility of a surf giant

As if that were not enough to make us believe that such a huge merger in the board sports industry is possible, one banker involved in the rescue of Quiksilver reportedly told a U.S. court that Oaktree did not exclude such an alliance “at some point”.

Nonetheless, some observers do not consider such a merger as likely. The question has been raised of why Billabong should enter into such a financial challenge after the Aussie company itself showed – as reported – some signs of recovery in its last financial year ended June 30.

In fact, the Oaktree suggestion on the table would mean a $175 million injection from Oaktree itself and Bank of America allowing the investors to convert the loan into equity. A competing offer came in last week from a hedge fund, Brigade Capital Management, which would involve a loan worth $115 million to Quiksilver.

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