# BBG - Billabong International



## RichKid (18 November 2005)

Just checked out Billabong (BBG), was in a solid uptrend, has retraced since then, declined on falling volume with a final pivot low there at about 12.37. Has now consolidated and found support imo and has now worked its way out of the downtrend on higher swing lows and highs (ie an uptrend), the most recent swing low is at 13.05 imo.

Has broken the dowtrend and retested succesfully (so far) as shown in chart. Very high volume today- not sure why, maybe some form of option expiry or share conversion as there were two very large parcels traded. I'm watching the all time high (c14.60) for an approach to that level and further on to new highs. I like to get these swings early if I can, riskier though.

Downside risk is that this breakout is from a possible descending triangle but the early breakout suggests strength. A break of the recent swing high c13.55 would probably see more buyers enter as the pattern would be abvious by then.

I'm still learning this swing trading stuff so I may well be wrong, comments welcome from those swing traders out there.

Daily charts attached. Critiques welcome.


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## Kauri (18 November 2005)

*Re: BBG Billabong- upswing commencing?*

Just a thought...   :luigi:


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## RichKid (18 November 2005)

*Re: BBG Billabong- upswing commencing?*



			
				Kauri said:
			
		

> Just a thought...   :luigi:




Kauri, if I ever want to see a rounding turn I'll give you a holler as I'm sure you'll find one when no one else can!! 

But seriously, thanks, I didn't note that at first, didn't look circular enough for me but that rounding pattern is there, it's a change of short term trend in my opinion. I note that a lot of these patterns which have a distinct pivot point end up with these swings in the a-b-c pattern. So it's good to see different patterns and styles of trading correspond as it adds to the evidence of a trend, in this case the commencement of an upswing. Even if the sp falls a bit lower next week the higher swings will still be valid until the previous swing low is broken.


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## Kauri (18 November 2005)

*Re: BBG Billabong- upswing commencing?*



			
				RichKid said:
			
		

> Kauri, if I ever want to see a rounding turn I'll give you a holler as I'm sure you'll find one when no one else can!!
> 
> But seriously, thanks, I didn't note that at first, didn't look circular enough for me but that rounding pattern is there, it's a change of short term trend in my opinion. I note that a lot of these patterns which have a distinct pivot point end up with these swings in the a-b-c pattern. So it's good to see different patterns and styles of trading correspond as it adds to the evidence of a trend, in this case the commencement of an upswing. Even if the sp falls a bit lower next week the higher swings will still be valid until the previous swing low is broken.




    Without posting any charts..      the SP is sitting on a trend line drawn from Aug 04 through May 05 and on to the present. Everything seems to be in place for your swing up.


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## RichKid (18 November 2005)

*Re: BBG Billabong- upswing commencing?*



			
				Kauri said:
			
		

> Without posting any charts..      the SP is sitting on a trend line drawn from Aug 04 through May 05 and on to the present. Everything seems to be in place for your swing up.




Thanks for pointing that out Kauri, all that overlap of key trend lines suggests this is an important area for price trend determination. Odds are pointing up generally but we could see some volatility til this counter-trend reversal ends convincingly.


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## RichKid (24 November 2005)

*Re: BBG Billabong- upswing commencing?*

Got stopped out of this one. Poor stop placement imo- ie not the perfect set up. Let's see if it provides a low risk entry soon. Those rejection candles last week didn't help, I think I jumped the gun. Also noted a director sold a big parcel of shares last recently too, not a good sign. Let's see if support holds near that pivot. Appears to be a lower swing high now.


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## johnno261 (24 November 2005)

*Re: BBG Billabong- upswing commencing?*



			
				RichKid said:
			
		

> Kauri, if I ever want to see a rounding turn I'll give you a holler as I'm sure you'll find one when no one else can!!
> 
> But seriously, thanks, I didn't note that at first, didn't look circular enough for me but that rounding pattern is there, it's a change of short term trend in my opinion. I note that a lot of these patterns which have a distinct pivot point end up with these swings in the a-b-c pattern. So it's good to see different patterns and styles of trading correspond as it adds to the evidence of a trend, in this case the commencement of an upswing. Even if the sp falls a bit lower next week the higher swings will still be valid until the previous swing low is broken.




aaahhhhhh Very Good!! Kauri, can we call you "CUP OF TEA KAURI"? ha ha
Do agree with RICHKID, it is great to see how we all perceive Charts!! 
Cheers
Johnno


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## RichKid (24 November 2005)

*Re: BBG Billabong- upswing commencing?*



			
				johnno261 said:
			
		

> aaahhhhhh Very Good!! Kauri, can we call you "CUP OF TEA KAURI"? ha ha
> Do agree with RICHKID, it is great to see how we all perceive Charts!!
> Cheers
> Johnno




Ha Ha!! I like that, 'cup of tea Kauri?' That's a good one.

I've heard that only some people are good at spotting visual patterns, with so many sets of eyes on this forum we should be able to get some good pattern studies going. Clearly Kauri specialises in shapely patterns 

Let's see what BBG turns into.


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## Dutchy3 (6 January 2006)

*Re: BBG Billabong- upswing commencing?*

Hi All

BBG up at 14.50 again.

Is this a DOUBLE TOP or has enough frustration built over the 5 months in the accumulation pattern ging to be enough to push this one through?

Cheers


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## ob1kenobi (6 January 2006)

*Re: BBG Billabong- upswing commencing?*

Rich, I agree with your analysis. This is the third upswing in the YTD. The trough occurred around May 05. I bought in then at $11-67, so very happy at present. In December 05, BBG announced that it had acquired 100% of Nixon a boardwear accessories company. The CBA announced it was selling its 9% in BBG. Rereading the ASX announcement it seems that the various financial management companies that CBA control were taking advantage of the Nixon announcement the day before and it looks like some warrants and / or options may have come due at that time. Nonetheless, BBG does appear to be in an upswing. It's interesting to note that it has been overbought more times than it has been oversold. Perhaps investors are still seeing value and growth in BBG. Time will of course tell. Chart is attached.


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## RichKid (6 January 2006)

*Re: BBG Billabong- upswing commencing?*

Nice chart Ob1, shows the saucer like turn, this pause/bounce back from the highs is to be expected, only question now is how will it react? Will we see some sort of handle forming or will it range again or coil before a breakout...many possibilities.


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## ob1kenobi (7 January 2006)

*Re: BBG Billabong- upswing commencing?*

I agree Rich! Many possibilities. At close of trade on 6 January it was slightly down. A possible recoil, a possible retracing of the previous high. Time will tell but could be worth watching.


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## Dutchy3 (7 January 2006)

*Re: BBG Billabong- upswing commencing?*

Looking for support around the 13.90 area and then another BIG WHITE to compound in at half the current position size


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## RichKid (7 January 2006)

*Re: BBG Billabong- upswing commencing?*



			
				ob1kenobi said:
			
		

> I agree Rich! Many possibilities. At close of trade on 6 January it was slightly down. A possible recoil, a possible retracing of the previous high. Time will tell but could be worth watching.




I'm watching the top of that ledge from last month, I nearly bought there but chickened out.


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## Dutchy3 (8 January 2006)

*Re: BBG Billabong- upswing commencing?*

Here's the chart.

13.90ish would need to be it in terms of a retracement to have confidence to go longer looking for the 14.60 breakout.

This week should see the support kick in. By Friday, if this is as strong as it appears to be, the retracement could be over.


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## RichKid (8 January 2006)

*Re: BBG Billabong- upswing commencing?*



			
				Dutchy3 said:
			
		

> Here's the chart.
> 
> 13.90ish would need to be it in terms of a retracement to have confidence to go longer looking for the 14.60 breakout.
> 
> This week should see the support kick in. By Friday, if this is as strong as it appears to be, the retracement could be over.




Nice chart there Dutchy3, it's that major high that's in the way now, I'm looking to see if it'll close that gap just above the ledge or for signs that the short term decline is over.


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## Dutchy3 (8 January 2006)

*Re: BBG Billabong- upswing commencing?*

Hi RK

May indeed be a double top and this one will not work out.

I keep expecting to see Australian retail trade fall over and BBG with it. This XMAS appeared to be yet another records, albeit without the growth of previous years. Still the figure to watch is unemployment. As long as the generation who started work after 1992 have work I can't see the domestic consumption economy having too many issues. When it does stop ... there will be tears ...

BBG does have a history of making sure moves though. has not spent too much time range trading over its short history.


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## RichKid (9 January 2006)

*Re: BBG Billabong- upswing commencing?*



			
				Dutchy3 said:
			
		

> Hi RK
> 
> May indeed be a double top and this one will not work out.
> 
> ...




I am somewhat inclined to class BBG differently as it has exposure to international markets (including niche markets within that sphere) and is one of the few Australian companies to have gone global successfully and early. But investor sentiment is important and they can easily mark down a whole sector in one blow.


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## ob1kenobi (9 January 2006)

*Re: BBG Billabong- upswing commencing?*



			
				RichKid said:
			
		

> I am somewhat inclined to class BBG differently as it has exposure to international markets (including niche markets within that sphere) and is one of the few Australian companies to have gone global successfully and early. But investor sentiment is important and they can easily mark down a whole sector in one blow.




I agree Rich. I also have shares in Collorado and they don't seem to be as upbeat at times as BBG is. BBG have been making acquisitions globally and that may also be sending a positive message to the markets. As an Australian global business it has been successful, despite the sector its in.


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## Dutchy3 (11 January 2006)

*Re: BBG Billabong- upswing commencing?*

BBG finding support @ .382 of the range up?

Looking for an excuse to compound pending these levels holding and top at 14.50 ish being taken out.


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## Dutchy3 (31 January 2006)

BIG WHITE into NEW AIR and above a significant point in its trading history

Hold Long


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## RichKid (15 June 2006)

Hey Dutchy and others who follow BBG, here's another EW study, beginner's attempt only so please don't trade it! Shows a recent blow-off top. The red line at the wave 1 high is the point which invalidates the current count, should retrace to range of previous degree wave 4 (a running flat). I thought of this today because of a bullish broker note from www.egoli.com.au.


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## Chief Wigam (13 August 2006)

Hey Dutchy, I can't quite work out your charts. Are you using waves? I'm fairly new to Waves, so would not know.

Looking at the sp on Friday, it seems the bears are in control. I'm expecting more down side next week for sure.


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## Dutchy3 (13 August 2006)

Hi

Agree ... I closed out of BBG a few months ago as it languished.

I too hold two small long ASX positions at the moment.

Even my super I've adjusted out of Aust Shares and into Aust property. There will be an opportunity cost of holding the index out to 06/07.


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## nomore4s (31 October 2007)

This thread has been very quiet for a while.

This chart is showing some interesting signs atm for my study with Wyckoff. So far it looks like we have had a selling climax although the vol is relatively low compared to the 2 secondary tests.

It's the 2nd ST that has my interest, while the vol is ultra high on the big gap down day (26.10.07), the range while wide isn't super wide compared to the SC and some of the other bars. This may be a weak day but I'm also seeing some strength in this bar and the bars following it, someone appears to be buying at these levels. The 2 bars following the 26th have weak closes off the highs but have not been able to push past the lows of the 26th even with high-ish vol and todays bar is showing signs of supply starting to ease off.
I would now be looking of some sort of rally in the next week or so and then another re-test (or shakeout) under the $14.80 area but on reduced vol indicating that supply has be absorbed.
This trading range looks to still have a bit of work to do, but to me is showing some signs of accumulation.

The P&F chart (not attached)  is also starting to show signs of a base (cause) building.

Any feed back or thoughts are welcome.

Discussion only, I don't hold (yet).


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## nomore4s (2 December 2007)

Since my last post I have taken a position at around $14.30 based on the support shown at the $14.00 level and the spring on the 27.11.07. While the vol was still highish on the spring the size of the spring convinced me it was worth the risk with a stop at $13.80.

Prices are now at the 50% retracement level of the last move down (red line) and how the sp reacts at these levels will be telling imo. The support area discussed in my last post which didn't hold may provide some support now with prices bouncing nicely off that area on Friday.


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## Rainmaker2000 (19 January 2008)

Does anyone here have thoughts on BBG the business, not bbg the share......it sure looks to be wiggling into range.......it has always been the business I dream of after being heckled constantly as a youngster poor enought to only afford Hang Ten clothing......I diggress, but this correction is sure bringing some gems to earth or whatever analogy...


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## BlingBling (20 January 2008)

Bong is going strong as a business.
Personally I think their clothes are much better than QS and Rip Curl over all and their current sponno'd surfers are killing it.
QS on the other hand is a bit stale if you ask me.
Bong's buying of other businesses such as Nixon, kustom, VZ, Element, Electric etc Has been where they have done really well in my opinion. QS have been branding everything from shoes to sunnies under teir label and from a fashion point of view people don't want to be decked out in one brand (same heckling as your hang ten experience  )

Take this with a grain of salt though as I was a holder of a nice amount of BBG since float and got rid of them last year @ $18 after much deliberation. (one of my only decent decisions recently it feels like)
I'm looking at getting back in pretty soon.


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## Tristo (7 February 2008)

I bought into Billabong today, not a big parcel though.

Price was too good for me to keep going past, and I've been watching very closely the last few days, with research and analysis proving ok, confident of both long term and short term prospects


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## Rainmaker2000 (7 February 2008)

Hey Tristo.......you may wish to have a read of the latest issue of The Rainmaker for BBG......definitely an interesting proposition


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## Tristo (8 February 2008)

You might be surprised to know I had read it before I bought as one of the many bits of info i had looked at for research


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## Tristo (14 February 2008)

Up 7.65% this morning on little news, apart from strength in US retail sales rather than expected weakness.


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## AQR (4 December 2008)

It's down 16% odd today, that hurts. I thought it was tip toeing along nicely.

Does anyone know whats happening?

Geoff.


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## Sean K (4 December 2008)

AQR said:


> It's down 16% odd today, that hurts. I thought it was tip toeing along nicely.
> 
> Does anyone know whats happening?
> 
> Geoff.



First thing I do when something like this happens is check the anns.

Being a consumer discretionary, of sorts, this was in the waves. 

MARKET UPDATE

GOLD COAST, 4 December 2008: A further deterioration in trading conditions at a consumer level, primarily in the United States, has led Billabong International Limited to review its forward expectations for the 2008-09 financial year. The softness, which is being seen at both the wholesale and company-owned retail levels, particularly in the US, has accelerated throughout November. In response to this, the Company is revising its *full year guidance to a range of 6% to 10% earnings per share (EPS) growth, down from the previously forecast 12% to 16% EPS growth *provided at the time of the Company’s Annual General Meeting in October 2008. This assumes a revised annual average exchange rate of 75 cents for the AUD/USD and an unchanged 55 cents for the AUD/Euro.


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## skc (4 December 2008)

AQR said:


> It's down 16% odd today, that hurts. I thought it was tip toeing along nicely.
> 
> Does anyone know whats happening?
> 
> Geoff.




Earning guidance downgrad... see ASX release or any business news website.

Do you really have to post on this forum to get this kind of information??


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## AQR (4 December 2008)

skc said:


> Earning guidance downgrad... see ASX release or any business news website.
> 
> Do you really have to post on this forum to get this kind of information??




Thanks for the advice, sorry I took up your space & time, next time I have an inane question, I'll go elsewhere, where it's hopefully more friendly.

Geoff.


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## skc (4 December 2008)

AQR said:


> Thanks for the advice, sorry I took up your space & time, next time I have an inane question, I'll go elsewhere, where it's hopefully more friendly.
> 
> Geoff.




Geoff, I believe we will all enjoy a richer forum if posters put more informed discussions forward - like one's view of any announcement, or something like "BBG tanked today, I looked everywhere but there was no news, does anyone know anything?"

Nonetheless, my comment/question was not at all meant to be personal attack - so please don't take offense. I hope you continue to use this forum.


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## Trader Paul (7 December 2008)

Hi guys,

BBG ... from a techie's view, we will be looking at some heavy-duty downside
in 2009, particularly around 20-26032009 and then looking for an extreme low,
between 21092009-04112009 ..... !~!

..... first signs of recovery may emerge soon after, around 06112009, when
some minor and positive news may be expected ..... 

Updated BBG chart, attached below.

Merry Christmas and happy trading in 2009.

have a great weekend

paul



=====


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## drlog (29 April 2009)

In the last week or so, it has been going up against the rest of the market.

*Why?*

There are no announcements on ASX except that PPT were selling off some BBG.

I mean, I don't mind this one bit  but I would like to know why?


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## LeftRightOut (27 September 2009)

BBG is a good company, run by good management, who have acheived good results and who have good prospects. I am not surprised in the least that the price has kept climbing recently, and I expect it has a bit to go (my target short term is $11.93 / ~6.5-7%).
On the technical side, it recently broke resistance at 11.0 and has stayed there, this is a very bullish signal and one that I think will remain while ever the greater market is boyant.
If fiscal policy (if you could call it that) here and in the US expand on the retail spend, then I'll be revising upwards.


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## LeftRightOut (29 September 2009)

I sold out at 11:95, looks like plenty of others did too (as high as 12.19). Satisfied with that, as I bought in at 8.59 at the end of July (almost 40%). I think there is long term upside, but in the mean time, and judging by todays action, I'd rather site on the sidelines on this one.
I'd be looking to buy back in closer to 10.5, depending on what's happening with the greater market.


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## kermit345 (29 January 2010)

As there has been no recent discussion for BBG just wondering if anyone has some thoughts as to their potential? my price target for within the next 12 months would be around the $13 mark and I think at $10.50 (basically where they are currently) they have great potential.

Reasonable dividends with a DRP, long term good management and not major debt.

thoughts?


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## frankie_boy (20 August 2010)

BBG back down to prices they were in 2004... People giving up the surfing life


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## prawn_86 (20 August 2010)

frankie_boy said:


> BBG back down to prices they were in 2004... People giving up the surfing life




So many other surf brands out there, billabong is nothing special. Personally i think surf brands just rip off other brands anyway


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## drlog (20 August 2010)

It's the fundamentals. Simply put, they have stopped growing. If you buy BBG now, you can basically expect a small amount of growth over the coming years.

Although, if the US and Europe were to pick up all of a sudden, BBG would do much better.


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## buysellmestuffed (23 August 2010)

any one with a decent angle on BBG share price or can do a price chart with a range pattern , dividend coming up next month so surely there will be a runup , but the entry price must be near correct .


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## buysellmestuffed (23 August 2010)

kermit345 said:


> As there has been no recent discussion for BBG just wondering if anyone has some thoughts as to their potential? my price target for within the next 12 months would be around the $13 mark and I think at $10.50 (basically where they are currently) they have great potential.
> 
> Reasonable dividends with a DRP, long term good management and not major debt.
> 
> thoughts?




so is $7 .59 good value then basically if they were so good at $10.50 they must be the ducks guts at $7.59 , why then are they still falling


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## skyQuake (23 August 2010)

buysellmestuffed said:


> so is $7 .59 good value then basically if they were so good at $10.50 they must be the ducks guts at $7.59 , why then are they still falling




By that logic its even better at $5, deep value at $2, and an absolute ripper at $0 while the liquidators move in.


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## VSntchr (19 August 2011)

DEVASTED that I couldn't find a way to short BBG. I was trying to do it two weeks ago with the price around $5...no options and no CFDs (that I could find) made it too hard 

With the drop today I wish I looked a bit harder!!!!


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## skc (19 August 2011)

VSntchr said:


> DEVASTED that I couldn't find a way to short BBG. I was trying to do it two weeks ago with the price around $5...no options and no CFDs (that I could find) made it too hard
> 
> With the drop today I wish I looked a bit harder!!!!




Get a better provider?! Both IG and MFGlobal had BBG on offer. I always thought BBG was expensive relative to other retailers but was surprised by the fall today.

BBG was the top 10 shorted stock for a long time and such crowded trade isn't usually so profitable. It's even more surprising that it finished on the low for the day when I expected to see some short covering on the results.

Fundamentally EPS 47c against share price of $3.82 at the close = PE ~8. You would think that's close enough to the valuation of most other consumer stocks...


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## notting (25 November 2011)

However, whilst most major retailers are falling over themselves to get internet buying up an running and bricks and mortar look about as enticing as an earthquake, BBG is buying up shops at bargain prices. :bloated:


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## skc (19 December 2011)

notting said:


> However, whilst most major retailers are falling over themselves to get internet buying up an running and bricks and mortar look about as enticing as an earthquake, *BBG is buying up shops at bargain prices*. :bloated:




Pretty rare to see a strategy unravel in less than a month.

Someone smarter can work out what the sales data table is trying to hide. Why not just show monthly sales change for Sept, Oct and Nov? Instead they chose 3 months (24.7%), 4 months (17.2%) and 5 months (11.7%).

If say 3 months sales last year was 100 (base number) and 4 months 130 (number I made up). Then this year 3 month = 124.7 (100 x 24.7%) and 4 months = 152 (130 x 17.2%). Which means net month 4 = 152-124.7 = 27.3, compared to 30 last year... or a reduction of ~10% for Oct.

I would think BBG is sailing pretty close to their debt convenent with this downgrade... and that's probably why the market's panicking.


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## Chasero (19 December 2011)

Well, looking at that trend,

for the 6 months to Dec average = 5%

for the 7 months to January 2012 = -1%??

That's all I am seeing at the moment, the forecast trend is NEGATIVE.

that explains the dumping today?


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## skc (19 December 2011)

Chasero said:


> Well, looking at that trend,
> 
> for the 6 months to Dec average = 5%
> 
> ...




The dumping today is due to the last paragraph... retaining Goldman to advise on capital structure. A dilutive cap raising is likely on the way...


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## Chasero (19 December 2011)

skc said:


> The dumping today is due to the last paragraph... retaining Goldman to advise on capital structure. A dilutive cap raising is likely on the way...




Oh.. possible CR, wow.

Though I bet people looking at BBG sales figures are wondering about similar impacts all around (and retail sector in general), sigh.


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## skc (20 December 2011)

Looking at BBG's balance sheet to 30 Jun it had ~$600m debt (~$450m net of cash) and $164m in deferred payments from acquisitions. With EBITDA downgraded to $70m (or $140m full year) that's debt/EBITDA ~4.5.

I wonder where is the debt convenent level, and what is considered stretched by the market?

When PGA went through a disasterous cap raising it had debt and deferred payments ~$450m and EBITDA ~$46.7m ($75m normalised). So the ratio was 9.5x (or 6x)... i.e. a lot worst than the position BBG is now.

An over-reaction? Hard to tell.


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## prawn_86 (17 February 2012)

Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.

Did anyone catch the knife?


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## Chasero (17 February 2012)

prawn_86 said:


> Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.
> 
> Did anyone catch the knife?




Nope. I was watching BBG with interest.. thought it might be taken over at these levels.

Was never brave enough to hit the buy button when looking at the chart over 5 years...


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## skc (17 February 2012)

prawn_86 said:


> Up 50% today on the back of reporting. Market obviously thinks things aren't as dire as previously predicted.
> 
> Did anyone catch the knife?




More to do with their Nixon partial sale / JV than the report. That transaction will release $275m for debt reduction and was done at a much higher multiple than BBG is trading.

The transaction indicates the parts are worth much more than the sum. Together with PE rumours and short covering, today's jump is not that dramatic imo.


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## prawn_86 (17 February 2012)

skc said:


> More to do with their Nixon partial sale / JV than the report. That transaction will release $275m for debt reduction and was done at a much higher multiple than BBG is trading.




Yeh thats what i figured. Shows someone is actually interested, and they can unlock some value, thus reducing the need for a possible cap raising


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## Huskar (19 February 2012)

prawn_86 said:


> Yeh thats what i figured. Shows someone is actually interested, and they can unlock some value, thus reducing the need for a possible cap raising




I think the jump is due to the mention in that market release (in the last full paragraph mind you) of a "non-binding indicative proposal" of $3.00 per share by TPG Capital.


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## Huskar (8 March 2012)

Any thoughts on BBG right now after founder Gordon Merchant spent ~$8m topping up on his holding? 

http://business.transworld.net/89568/news/billabong-founder-buys-2-5m-shares/

This aggressive move appears to be in the hope that TPG comes back with an offer of something beginning with a 4. Either he will get his way and/or another suitor will arrive in which case there is plenty left on the table at a current SP of $2.70 or TPG will walk away and the SP will collapse back to ~$1.80 where it was before the offer.

If crudely assigning probabilities at 50/50 then risk/reward is:

$1.00 risk = ~37% downside
$3.80 payoff (at a conservative min) = $1.10 (~40%) upside

This indicates to me that the market is uncertain which way it will go (ie 50/50 is what everyone is thinking right now)..


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## stocksforlife (31 May 2012)

Now that we are close to the lows I think Billabong is one to start buying again. The difference between now and when the lows were reached last time was that there was a real fear that their debt covenants would be breached. The sale of Nixon went a long way to reducing their debt so that fear should not be a factor now. With new leadership and a cost reduction plan in place I think the risk vs reward is good for this stock right now. 

The other major factor is that the Australian dollar is much lower than earlier in the year. The more the dollar falls the better for Billabong as it gets most of it's earnings in US dollars. The US economy is also showing signs of life and any pickup there would see a big lift in sentiment for a stock like Billabong.


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## CanOz (31 May 2012)

There is ZERO interest in this stock at the moment. Its very close to filling a breakaway gap as well. If this stock had great fundamentals then why are the instos not accumulating this? There does not appear to be any volume jumping in at 2.00 support...

I would want to see some really strong fundamentals here, otherwise there will soon be many other good uses for your capital, in my opinion.


CanOz


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## stocksforlife (31 May 2012)

CanOz said:


> There is ZERO interest in this stock at the moment. Its very close to filling a breakaway gap as well. If this stock had great fundamentals then why are the instos not accumulating this? There does not appear to be any volume jumping in at 2.00 support...
> 
> I would want to see some really strong fundamentals here, otherwise there will soon be many other good uses for your capital, in my opinion.
> 
> ...




Best time to get in IMO. But if you want to wait for the big boys to buy in and then tell you to Buy that's your choice. I just pointed out that the reasons it was pushed so low last time are no longer all valid. The downside risk to this stock is the lows of around $1.80. The upside potential is much bigger. It won't be long before others realise this. This is a stock with a very large turnover so it won't take much to turn things around in the right direction.


----------



## CanOz (31 May 2012)

stocksforlife said:


> Best time to get in IMO. But if you want to wait for the big boys to buy in and then tell you to Buy that's your choice. I just pointed out that the reasons it was pushed so low last time are no longer all valid. The downside risk to this stock is the lows of around $1.80. The upside potential is much bigger. It won't be long before others realise this. This is a stock with a very large turnover so it won't take much to turn things around in the right direction.




The downside risks are that it goes to ZERO. Why is this a sound business? What is the attraction fundamentally? Does it have an attractive PE ratio? Is there debt to equity ratio attractive? Are they a growth business? 

You've offered nothing but the fact that the price is low so its a good buy???

Sounds like a ramp, if its unsupported.

CanOz


----------



## stocksforlife (31 May 2012)

CanOz said:


> The downside risks are that it goes to ZERO. Why is this a sound business? What is the attraction fundamentally? Does it have an attractive PE ratio? Is there debt to equity ratio attractive? Are they a growth business?
> 
> You've offered nothing but the fact that the price is low so its a good buy???
> 
> ...




Haha. So you want me to do your research for you? Ok here's some numbers then.

P/E less than 8. 
EPS 25 cents
Book value of $4.70
Revenue over $1.5B
Market cap now is just over $500M
Recent takeover bid of $3.30 per share which was rejected by board.
Recent sale of half of ONE of their many brands (Nixon) brought in US$285M



Want any more numbers?


----------



## prawn_86 (31 May 2012)

stocksforlife said:


> Haha. So you want me to do your research for you? Ok here's some numbers then.




SFL,

Before getting too narky i suggest you read the Posting Guidelines. ASF is a place for research and discussion and being tolerant of others research and discussion. 

If you post that you like a stock, you must post evidence as to why, rather than simply saying you do.


----------



## stocksforlife (31 May 2012)

prawn_86 said:


> SFL,
> 
> Before getting too narky i suggest you read the Posting Guidelines. ASF is a place for research and discussion and being tolerant of others research and discussion.
> 
> If you post that you like a stock, you must post evidence as to why, rather than simply saying you do.




If my post seemed narky I apologise but it was not meant at all to be that way. I did actually think it was funny that someone said I was ramping. I justified my post by saying that the debt had been reduced which was the main reason I believed the stock had previously been pushed so low. Well the numbers are there for anyone who is interested anyway. I would love to hear an opposite point of view backed up with numbers too. If anyone cares to add one I am all ears.


----------



## skc (31 May 2012)

stocksforlife said:


> Now that we are close to the lows I think Billabong is one to start buying again. The difference between now and when the lows were reached last time was that there was a real fear that their debt covenants would be breached. The sale of Nixon went a long way to reducing their debt so that fear should not be a factor now. With new leadership and a cost reduction plan in place I think the risk vs reward is good for this stock right now.
> 
> The other major factor is that the Australian dollar is much lower than earlier in the year. The more the dollar falls the better for Billabong as it gets most of it's earnings in US dollars. The US economy is also showing signs of life and any pickup there would see a big lift in sentiment for a stock like Billabong.




I agree with what you are saying. The Nixon sale stablised the balance sheet so it shouldn't be priced in distress like it was back in Dec. The currency impact from the fall of AUD/USD is beneficial but is offset by the rise in AUD/EUR. Plus while the US economy may be showing signs of recovery, the Australiaisa and EU consumer figures are turning quite negative.

On the P&L front, did your figures take the Nixon component out?

Nixon 12 month EBITDA was US$50.6m, so BBG sold 51.5% of that which is $26m. BBG's EBITDA in H1 was ~$74.1m. So the new EBITDA is (very roughly) $120m per year ($74.1 x 2 - $26).

Assuming all Nixon proceeds went into debt reduction, debt is now ~$220-230m. So Debt/EBITDA is <2x.

Buying today with a stop at $1.79 looks like a decent play. But it looks too straight forward and that level is where every men and their dog would place their stop. 

So I think I'd enter after signs of strength, or if there was a big wash out if it tags below $1.79 and trigger all the stops. I also won't hold too long just in case they throw a negative trading update announcement out.


----------



## CanOz (31 May 2012)

stocksforlife said:


> If my post seemed narky I apologise but it was not meant at all to be that way. I did actually think it was funny that someone said I was ramping. I justified my post by saying that the debt had been reduced which was the main reason I believed the stock had previously been pushed so low. Well the numbers are there for anyone who is interested anyway. I would love to hear an opposite point of view backed up with numbers too. If anyone cares to add one I am all ears.




I said it sounded like a ramp, if its unsupported. My view is that it at all time lows and showing no strength at all, this is a weak stock...especially for one that you say was bid for a takeover...go figure.

Until the trend-line is broken this stock is in a downtrend and could never again see the original issue price.

Good value, or is management not telling you everything? 

But then again accountants don't lie do they?

CanOz


----------



## Huskar (6 June 2012)

For knife-catchers *I mean F/A's like myself it looks like a bargain at first. 

But even if the accountants are telling the truth (PWC and Centro anyone?) I'm not so sure.

From $74m EBITDA for HY12 x2 = ~$150m to FY12. 

Then -5% for guesstimate of likely growth, -$26m for Nixon sale and -$15m for likely further impairment charge (mgmt said 100-150 stores and 400 jobs would be shed) = ~$101.5m. 

Then -$35m (about the same as 1HY) for I,D&A = $66.5m. 

Subtract tax @ 30% = $46.55m (18.3c EPS). So current price is ~10x P/E which is about right! 

It always amazes me how right the market can be most of the time. 

Of course now that I have said that TPG will come back with a $4 offer. 

Or some wag will show me how wrong my numbers are .


----------



## skc (21 June 2012)

skc said:


> I agree with what you are saying. The Nixon sale stablised the balance sheet so it shouldn't be priced in distress like it was back in Dec. The currency impact from the fall of AUD/USD is beneficial but is offset by the rise in AUD/EUR. Plus while the US economy may be showing signs of recovery, the Australiaisa and EU consumer figures are turning quite negative.
> 
> On the P&L front, did your figures take the Nixon component out?
> 
> ...




And here comes the trading update. 

FY12 EBITDA = $83-88m so ~good 25% below the guestimates above. US as per expectation, but Oz and EU suffering as expected.

A massive 6-for-7 cap raising at a GFC-type distressed price of $1.02. TERP = $1.46 but hard to see it not trading below that on the open. It "should" stay above $1.02 one would hope.


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## McLovin (21 June 2012)

skc said:


> And here comes the trading update.
> 
> FY12 EBITDA = $83-88m so ~good 25% below the guestimates above. US as per expectation, but Oz and EU suffering as expected.
> 
> A massive 6-for-7 cap raising at a GFC-type distressed price of $1.02. TERP = $1.46 but hard to see it not trading below that on the open. It "should" stay above $1.02 one would hope.




At 6 for 7 it seems like less of a cap raising and more of a bailout. Definately a salvagable business, IMO. A few bad decisions have been amplified by the economic cycle.


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## kermit345 (21 June 2012)

Its so hard to imagine a company like Billabong going under. I'm 25 and in my teenage years if you weren't wearing Billabong or something similar then basically you weren't cool. I still have some Billabong shirts I wear now.

Agree with you McLovin, they were travelling along nicely until they decided to go on a debt fuelled shopping spree at the peak of the GFC which in combination with online shopping has totally smashed Billabong. They are certainly doing their best to salvage the business and potentially give shareholders at least some respite from the painful downtrend its in at the moment but its unbelievably hard to see light at the end of the tunnel currently.

Consumer confidence is likely to stay dampened for some time and online shopping in my view is only going to grow further. Billabong does have the potential for a turn-around story but is anyone willing to gamble on it, and currently its exactly that, a gamble.


----------



## prawn_86 (21 June 2012)

kermit345 said:


> Its so hard to imagine a company like Billabong going under. I'm 25 and in my teenage years if you weren't wearing Billabong or something similar then basically you weren't cool. I still have some Billabong shirts I wear now.




They really do target the teen market, and that is part of their problem imo. Personally i find that all surf brands, tend to just copy what other brands are doing. So there tend to be other leading brands and then a year later the surf brands pick up that style and make it cool for the kids.

I think i owned some Billabong boardies once, but always thought it better to support smaller, more innovative clothing labels rather than surf brands with very little originality. THat said, a lot of my friends in high school had heaps of clothes from surf brands.

Perhaps if they were to target people our age, who grew up with them, with a more fashion conscious, less lairy, clothing label that may be successful.


----------



## trillionaire#1 (21 June 2012)

prawn_86 said:


> They really do target the teen market, and that is part of their problem imo. Personally i find that all surf brands, tend to just copy what other brands are doing. So there tend to be other leading brands and then a year later the surf brands pick up that style and make it cool for the kids.
> 
> I think i owned some Billabong boardies once, but always thought it better to support smaller, more innovative clothing labels rather than surf brands with very little originality. THat said, a lot of my friends in high school had heaps of clothes from surf brands.
> 
> Perhaps if they were to target people our age, who grew up with them, with a more fashion conscious, less lairy, clothing label that may be successful.





Agreed.Billabong may need to broaden their market appeal to keep things moving in the right direction.


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## carmaduke (22 June 2012)

BBG 6 for 7 rights issue...how does an existing shareholder actually "accept" and buy into this offer. I thought the forms get sent out in the post but looking at their dates, it says "Institutional Entitlement Offer: Thursday 21 June to Friday 22nd June at 11:30am, which is before the record date of 26th June even. And Trading of new shares issued under the offer just days later at 29th June.

With the short timeframe, does this mean an existing shareholder has to act on this in some other way before 11:30am on the 22nd? Confused...


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## skc (22 June 2012)

carmaduke said:


> BBG 6 for 7 rights issue...how does an existing shareholder actually "accept" and buy into this offer. I thought the forms get sent out in the post but looking at their dates, it says "Institutional Entitlement Offer: Thursday 21 June to Friday 22nd June at 11:30am, which is before the record date of 26th June even. And Trading of new shares issued under the offer just days later at 29th June.
> 
> With the short timeframe, does this mean an existing shareholder has to act on this in some other way before 11:30am on the 22nd? Confused...




The insto offer will be done and dusted before the retail offer opens on 29 June. You won't need to make a decision until before the close on 17 July.


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## kermit345 (22 June 2012)

I dont have the offer open infront of me but fairly sure if you read on there is a retail offer open until roughly 17th of July from memory?


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## skc (25 June 2012)

skc said:


> And here comes the trading update.
> 
> FY12 EBITDA = $83-88m so ~good 25% below the guestimates above. US as per expectation, but Oz and EU suffering as expected.
> 
> A massive 6-for-7 cap raising at a GFC-type distressed price of $1.02. TERP = $1.46 but hard to see it not trading below that on the open. It "should" stay above $1.02 one would hope.




BBG opened @ $1 and fails to stay above the heavily discounted issue price.

Price now is 94c... 

If one is to believe management forecast of EBITDA ~$130m in FY13... the shares at current price are cheap (but we've heard that before!). After the rights issue there'd be ~480m shares on issue, and debt ~$100m. So at 94c, EV ~$550m. EV/EBITDA multiple is only 4.23x... compare that with the Nixon transaction which was done at ~9.2x. So the numbers are there, but the market's trust of BBG hitting forecast is probably non-existence.

Regardless of the fundamentals, there's probably a quick long trade at 94c for price to head back up to $1, with a stop at 92c.


----------



## verce (25 June 2012)

skc said:


> BBG opened @ $1 and fails to stay above the heavily discounted issue price.
> 
> Price now is 94c...
> 
> ...




Well said. Here's another interesting article:

http://www.smh.com.au/business/who-will-pounce-on-billabong-first-20120625-20xeu.html

_"Speculation is rife that within the next two to four weeks private equity and a trade buyer will emerge. Names being touted include TPG, KKR and Archer, but the list could be far greater given this company still has some strong brands, it has just lost its way. Trade buyers with an interest are believed to include Nike and French luxury group PPR, which bought Volcom Inc, the Costa Mesa surf-and-skate brand, last year for $US607.5 million."_


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## McLovin (25 June 2012)

verce said:


> Well said. Here's another interesting article:
> 
> http://www.smh.com.au/business/who-will-pounce-on-billabong-first-20120625-20xeu.html
> 
> _"Speculation is rife that within the next two to four weeks private equity and a trade buyer will emerge. Names being touted include TPG, KKR and Archer, but the list could be far greater given this company still has some strong brands, it has just lost its way. Trade buyers with an interest are believed to include Nike and French luxury group PPR, which bought Volcom Inc, the Costa Mesa surf-and-skate brand, last year for $US607.5 million."_




That seems like slightly wishful thinking. Merchant took up 85% of his rights and was one of the key reasons the last bid fell over. Even saying that at $4/share he wouldn't agree to the sale. It doesn't look like he's getting ready to sell out.

The debt position looks much better now, compared to December, ~$600m reduction. It's still a good brand and as I said earlier it was hampered by some bad decisions and the economic cycle. Certainly not unsalvageable.


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## JTLP (25 June 2012)

On a personal level - BBG is dead.

I just don't think teenagers are into this sort of thing anymore. They'd rather go to Glue/Edge/General Pants and spend money on a plain tee or chino's than wear some surfie brand that hasn't been seen on their friends in god knows how long.

When I was a kid this stuff was ok - remember Globe? - but much like time and evolution things change and I just don't think the brands have that same equity they once did.

New positioning in brand strategy is required to get this thing moving again IMO


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## skc (25 June 2012)

JTLP said:


> On a personal level - BBG is dead.
> 
> I just don't think teenagers are into this sort of thing anymore. They'd rather go to Glue/Edge/General Pants and spend money on a plain tee or chino's than wear some surfie brand that hasn't been seen on their friends in god knows how long.
> 
> ...




I think unless we are well-recognised fashion gurus being able to foresee trends, personal experiences count for little in valuing BBG's brand. I thought Billabong was a stupid brand even when I was a teenager - I guess I was in the wrong crowd or something - but it didn't stop the share price going from $3.50 to $17. I have never heard of Nixon before but that's worth $500m... and I have no idea what ppl in the US and EU wears...

The proof will be in the number - and that's the only thing that matters.


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## JTLP (25 June 2012)

skc said:


> I think unless we are well-recognised fashion gurus being able to foresee trends, personal experiences count for little in valuing BBG's brand. I thought Billabong was a stupid brand even when I was a teenager - I guess I was in the wrong crowd or something - but it didn't stop the share price going from $3.50 to $17. I have never heard of Nixon before but that's worth $500m... and I have no idea what ppl in the US and EU wears...
> 
> The proof will be in the number - and that's the only thing that matters.




I'm pretty sharp on the fashion ball thank you very much :

What I'm really saying is increased competition and at competitive prices. Kids are way more savvy these days - many more options to get clothes. They're also more on trend - and as I said - strategically - I think BBG is very off.

You may be right in the US but I think EU will not be too flash...


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## McLovin (26 June 2012)

JTLP said:


> On a personal level - BBG is dead.
> 
> I just don't think teenagers are into this sort of thing anymore. They'd rather go to Glue/Edge/General Pants and spend money on a plain tee or chino's than wear some surfie brand that hasn't been seen on their friends in god knows how long.
> 
> ...




Someone's still into it, they sold $1.7b last year.

Never been my thing, I think I might have a pair of boardies somewhere, but I think this whole "BBG is dead" belongs in the same category as "bricks and mortar retailing is dead".


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## McLovin (26 June 2012)

McLovin said:


> That seems like slightly wishful thinking. Merchant took up 85% of his rights and was one of the key reasons the last bid fell over. Even saying that at $4/share he wouldn't agree to the sale. It doesn't look like he's getting ready to sell out.
> 
> The debt position looks much better now, compared to December, ~$600m reduction. It's still a good brand and as I said earlier it was hampered by some bad decisions and the economic cycle. Certainly not unsalvageable.




Apparently I was dead wrong on this. Gordy is up for it now! This thing is in play, a bid has to be coming.



> Billabong founder Gordon Merchant has thrown the door open to another takeover bid, saying he felt “bad” about rejecting a private equity offer four months ago and was now prepared to accept less.
> 
> Billabong shares nearly halved in value yesterday and have plunged by 60 per cent to 96 ¢ since the company rejected TPG’s sweetened $3.30 a share offer, valuing the company at $850 million, in *February. “I feel bad about the whole situation,” Mr Merchant told The Australian Financial Review from South Africa, where he is holidaying with his family.




http://www.afr.com/p/business/companies/dumped_billabong_founder_seeks_new_1GYCn253Ibb2CZBg13heJL


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## McLovin (6 September 2012)

Nice to see a second bidder come out of the woodwork. Hopefully a higher price follows them.


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## notting (5 October 2012)

Very interesting, *no movement!*
TPGs concern, I reckon, is whether BBG and its shareholders will cooperate after the 3.30 or whatever it was bid now to 1.40 something.
So, leak some doubt to the Financial Rubbish Rag, creating some doubt, watch the market panic to make the bid look sweet, sweeten it a bit more and hopefully you’re in for a song.
By the way, anyone notice how thin that thing is getting? Financial Windup I mean, all those lost jobs at Fairfax.  
What? they actually expect people to pay the same price!?
I have only ever liked the cartoons and at least they are still there.  So suppose it's less able to help you lose money so probably worth a bit more with less.
Have never bought it myself.


----------



## Smeg (5 October 2012)

You can't really compare the $3.30 bid to $1.40 since the number of shares is almost double. The current proposal of $1.45 is equivalent to roughly $2.70. Interesting thoughts though. Will be interesting the see what turns out. The fact that the 2nd bidder backed out does raise some doubts as to what dangers lie hidden in Billabongs books.


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## notting (5 October 2012)

Smeg said:


> You can't really compare the $3.30 bid to $1.40 since the number of shares is almost double. The current proposal of $1.45 is equivalent to roughly $2.70. Interesting thoughts though. Will be interesting the see what turns out. The fact that the 2nd bidder backed out does raise some doubts as to what dangers lie hidden in Billabongs books.




Really? Didn't think you could offer up more than 15% of your shares on issue at a time.


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## sammy84 (5 October 2012)

notting said:


> Really? Didn't think you could offer up more than 15% of your shares on issue at a time.




Also, they were issuing shares and receiving cash in return, so more shares but more value (theoretically).

Smeg your logic is correct if there was a share split.

Basket case company.


----------



## Tyler Durden (13 October 2012)

TPG withdrew its offer, sending the SP to as low as 83 cents, but no news here?


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## McLovin (15 October 2012)

TPG has shown what an absolute joke takeover law is in this country. The system is arcane, you shouldn't be allowed to look under the bonnet without, at the very least, break fees. If anyone else acted on non-disclosed information it would be called insider trading but for these wombats it's called "due diligence".

FWIW, I'm jaded because I bought pre the bid and then got greedy thinking a higher price was a certainty. Live and learn.


----------



## skc (15 October 2012)

McLovin said:


> TPG has shown what an absolute joke takeover law is in this country. The system is arcane, you shouldn't be allowed to look under the bonnet without, at the very least, break fees. If anyone else acted on non-disclosed information it would be called insider trading but for these wombats it's called "due diligence".
> 
> FWIW, I'm jaded because I bought pre the bid and then got greedy thinking a higher price was a certainty. Live and learn.




Breakfee probably won't help you much in this situation. Credit Swiss has new target price of 42c or something like that...

The concept of due diligence vs insider trading is a very interesting one. But how do you police it otherwise? Do you ask BBG to release information in the data room to the public?


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## prawn_86 (15 October 2012)

skc said:


> The concept of due diligence vs insider trading is a very interesting one. But how do you police it otherwise? Do you ask BBG to release information in the data room to the public?




Why should a potential buyer have access to data that a 'normal' investor (which is still a buyer just not the whole co) doesnt? Shouldn't this all be in the public domain anyway? 

Most public companies don't seem to be very public anymore...


----------



## McLovin (15 October 2012)

skc said:


> Breakfee probably won't help you much in this situation. Credit Swiss has new target price of 42c or something like that...
> 
> The concept of due diligence vs insider trading is a very interesting one. But how do you police it otherwise? Do you ask BBG to release information in the data room to the public?




At least with a breakfee you can avoid most of the tyre kickers.

Difficult to police no doubt, but without a formal bid on the table, I don't think it is at the stage of warranting due dilligence.


----------



## skc (15 October 2012)

McLovin said:


> At least with a breakfee you can avoid most of the tyre kickers.
> 
> Difficult to police no doubt, but without a formal bid on the table, I don't think it is at the stage of warranting due dilligence.




I wouldn't classify TPG as tyre kickers in this instance given that they spent a fair bit of time on it and it was their 2nd approach.



prawn_86 said:


> Why should a potential buyer have access to data that a 'normal' investor (which is still a buyer just not the whole co) doesnt? Shouldn't this all be in the public domain anyway?
> 
> Most public companies don't seem to be very public anymore...




Most data room data are pretty detailed (e.g. store by store sales by category for last 12 quarters) so it is pretty useless for the average investor while quite commerically sensitive for the competitors. It is also impractical for the company to provide this sort of information anytime an individual investor asks for it.

So I don't know what the right answer is.


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## prawn_86 (15 October 2012)

skc said:


> Most data room data are pretty detailed (e.g. store by store sales by category for last 12 quarters) so it is pretty useless for the average investor while quite commerically sensitive for the competitors. It is also impractical for the company to provide this sort of information anytime an individual investor asks for it.
> 
> So I don't know what the right answer is.




Agree with the competition part, but surely there is something that could be done for it. Maybe some form of online login for shareholders only? Although then of course competitors would just buy a few shares and read up all about each other...


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## McLovin (15 October 2012)

skc said:


> I wouldn't classify TPG as tyre kickers in this instance given that they spent a fair bit of time on it and it was their 2nd approach.




I don't think TPG were tyre kickers, although Bain seems to have been. Nevertheless, I think they should have had to put something on the table before they were given the keys to the castle.


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## McLovin (19 November 2012)

Now it's a director trying to take it over...

http://www.smh.com.au/business/billabongs-us-boss-trying-to-grab-control-20121119-29l3t.html


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## notting (19 November 2012)

McLovin said:


> Now it's a director trying to take it over...




At least he can't knock himself back.


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## skc (19 December 2012)

$1.10 deal announced with coupled with a trading update that slashed EBITDA forecasted in Sept = great pre-xmas wipeout for shareholders...

And the kicker is that the bidding consortium doesn't know about the trading update yet. So the deal is probably dead on arrival...


----------



## notting (19 December 2012)

skc said:


> And the kicker is that the bidding consortium doesn't know about the trading update yet. So the deal is probably dead on arrival...






> He said the consortium was also yet to conduct due diligence, a process during which two previous bids collapsed.
> 
> Read more: http://www.theage.com.au/business/b...spite-leaks-20121219-2bly5.html#ixzz2FUQLnp1S




*What???*
The guy bidding is a fricken ex very recent director.  As if he doesn't know what the probable result would have been and as if he needs to do due diligence.
How rediculous.
This guy reckons it's a cracking deal buy his behaiviour.


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## notting (14 January 2013)

It's now a double due diligence at 1.10
Odd the price took a bit of a dip at the end of the day just prior to the announcement, which I took a chunk of.
Perhaps it's a dumby bid.


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## notting (17 January 2013)

Mr Naude, Sycamore Partners and BOA Merrill Lynch should now walk, now that they have seen the books, and just sit out what happens with Nth Face and co.
Kick the price down.
Then come in with a counter bid if something looks like it's going to happen at an acceptable price with Nth Face and co.


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## notting (7 March 2013)

Lorna Karen Inman buys 713,401 shares.
Pretty confident after what was considered a pretty dire report.
Take overs on, I'd reckon.


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## bellamy83 (10 March 2013)

Sounds like a speculative buy tho!


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## notting (10 March 2013)

No  more so than any other traditional retailer at these levels. Sector has had a good turn recently.


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## bellamy83 (10 March 2013)

notting said:


> No  more so than any other traditional retailer at these levels. Sector has had a good turn recently.




true.. have seriously been thinking about it... especially with Launa buying in...


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## McLovin (21 March 2013)

Down 14.2% today, company has no idea why, either. Strange.


----------



## notting (21 March 2013)

Spose they could ring around and ask why people were selling it?:silly:

You could guess that-
It just fell through support, triggered shorters to sell and longs to flee.

Probably exacerbated by the recent call for Nth face and co to stump up or go away.
So those hanging for a deal may have taken the technical exacerbated action as a message that Nth face and co. are walking away.

Hope it is there at the open under the same mysterious fog!
I reckon the ex director wants it and thinks it's good value and Nth face would like to not have to compete with it so will try to make the bid hard or even put in a genuine competing bid to at least put the pressure on the new competition if they don't really want it.


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## YMI (21 March 2013)

I wonder how they simply can stop the stock from further trading, is that something that happens regularly? And does this mean it’s a buying opportunity as soon as the market opens tomorrow?


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## notting (21 March 2013)

It's a bit odd to call a halt to trading because of large stock moves.  
When there is a takeover on the table it happens a bit.

*I* think it's a buy tomorrow at this level and was buying today, but it could drop another 15% till something of substance emerges. 
The other million or so market participants may think differentlty and certainly seem to be at present, so what *I* think is just that.
*I* can afford for it to go to zero!  
Generally it is recommended not to play takeovers.


----------



## skc (21 March 2013)

McLovin said:


> Down 14.2% today, company has no idea why, either. Strange.




Watch it this morning when it fell ~4% on what looked like committed selling, but the next time I glanced at it it was at 65c... wish I paid more attention on the short side.

Are you still holding?




notting said:


> Spose they could ring around and ask why people were selling it?:silly:
> 
> You could guess that-
> It just fell through support, triggered shorters to sell and longs to flee.
> ...




They mentioned the AFR article but that was published before the market opened. The shorts increased by ~1% (~7m shares) in the past week but the overall level of shorting is relatively low at 2.85%. 

What's the North Face story? Do you have a good artcile? North Face is more winter adventure gear than surf / street wear? Or am I totally out of sync with fashion these days 



YMI said:


> I wonder how they simply can stop the stock from further trading, is that something that happens regularly? And does this mean it’s a buying opportunity as soon as the market opens tomorrow?




Trading halts happen quite regularly. If BBG didn't halt themselves, ASX would have halted trading for them in the name of continuous disclosure and orderly markets. As to buying opportunity... it all depends on what the real reason is, whether the seller has finished selling, and where it opens. I'd imagine it will be a tentative open (i.e. not much higher than today's last price), but if there's no selling after the first few minutes it could run back towards the resistance at least.

I think it's a two horse race between SDL and BBG on the most farcical takeover saga ever.


----------



## McLovin (21 March 2013)

skc said:


> Are you still holding?




Nope. I bought and sold at around a $1. Of course in the interim it went to $1.40. Gekko is wrong, lesson learned.

If this buyout doesn't go ahead, then look out below. I'll buy it below 50c.


----------



## notting (21 March 2013)

skc said:


> What's the North Face story? Do you have a good artcile? North Face is more winter adventure gear than surf / street wear? Or am I totally out of sync with fashion these days




I read something about them whanting to take some of the brands stuff under and the consortium partners would take the  other bits.  It think they are being mischievous.  When do you go to an auction and bid the same price as the previous bid?  Crap.



skc said:


> I think it's a two horse race between SDL and BBG on the most farcical takeover saga ever.



No way.   SDL craps all over it.
Starts with a plane crash killing the whole team,  2 years or Chinese torture, director convicted for insider trading, flees the country - gets away!, Final moment - Hanlong CEO arrested for God knows what in China perhaps for *getting caught* murdering board members?  How can you beat that!!


----------



## skc (21 March 2013)

McLovin said:


> Nope. I bought and sold at around a $1. Of course in the interim it went to $1.40. Gekko is wrong, lesson learned.
> 
> If this buyout doesn't go ahead, then look out below. I'll buy it below 50c.




Latest EBITDA guidance = $74-$85m in constant currency terms, so say $80m. BTW the guidance went from $130m in Sept to $85-92m in Dec then $74-85m in Mar, so based on this trajectory it'd be ~$60m come June.

Take $80m EBITDA and trading at 6x gives EV of $480m. 

Debt was $152m, deferred consideration $55m, so equity value ~$273m. With 480m shares on issue that's 57c per share. By the time EBITDA falls to $60m, the same calculation yields 32c per share.

So below 50c is a pretty real possibility and may not turn around until there are concrete signs of EBITDA turnaround.


----------



## skc (21 March 2013)

notting said:


> No way.   SDL craps all over it.
> Starts with a plane crash killing the whole team,  2 years or Chinese torture, director convicted for insider trading, flees the country - gets away!, Final moment - Hanlong CEO arrested for God knows what in China perhaps for *getting caught* murdering board members?  How can you beat that!!




So true. SDL wins by a country mile.


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## McLovin (21 March 2013)

skc said:


> Latest EBITDA guidance = $74-$85m in constant currency terms, so say $80m. BTW the guidance went from $130m in Sept to $85-92m in Dec then $74-85m in Mar, so based on this trajectory it'd be ~$60m come June.
> 
> Take $80m EBITDA and trading at 6x gives EV of $480m.
> 
> ...




I've seen a few broker reports floating around with valuations of 30c. That seems a bit overdone to me. My forecast is that we are at or very close to the bottom of the cycle for BBG. If I'm wrong then my 50c valuation looks optimistic. I also think the mid life crisis the main brand is going through is salvagable. Then again, I saw my 60 year old uncle wearing a pair BBG boardies the other day.


----------



## YMI (21 March 2013)

Thanks guys for explaining that. Because the outlook of the company doesn’t seem too rosy, I think I won’t bet real money on it. I’ll buy some virtual shares for my ASX game and hope it’ll improve my rank from ~9000 to perhaps ~5000


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## notting (21 March 2013)

As soon as stock is in play the fundamentals don't matter until that is all over and it doesn't happen.
Whilst it is in play, I look at the motives of the players.
This one is interesting because you had a guy leave the board to make a bid at a price.
That to me meant he knows what it's worth and thinks he can make a fortune and has to convince backers to help him.
Prior to that I wasn't interested in the previous take over offers, there was no way of reading it.

The brand strength seems to be being validated by the fact that a competing brand has gotten involved.  Either way I think they think it is better than their brand, (I new BB before Nth) and want it or at the very least don't want it against them or gives them easy leg into diversified products and styles.

To me the current bid price is serious but the Mexican stand off is delaying the process.  The auctioneer is calling for bids and everyone is looking at their shoes.  But they are there!


----------



## ROE (21 March 2013)

this puppy is very sick, they also has lease liability in hundred of millions last time I look around 400m-500m.
they are closing up shop fast and furious because a lot of  their brick and mortal shop is losing money...

and because of lease liability there is no way they can restructure and cut cost in a meaningful way...leave shop open you lose money, close shop you face lease liability ....

with 100m plus debt there are not out of the wood yet..they could face capital raising and a whole raft of stuff
if the bankers getting nervous if the take over doesn't eventuate...

2 PE look at the business and walk tell me something is seriously wrong....and now two is looking and they taking a long long time so something isn't right, lot of ??? in the book I reckon and if these 2 walk god know what stuff they carries that scares everyone after they dig deep...

I think it's a punt rather than investment grade ....


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## notting (9 April 2013)

I can't remember a company accepting a takeover bid that is 20% below its last traded price.
Spose you can't expect more from a surf ware company with a Bong in its trade mark.
Wonder if it's a ploy to extract a counter offer out of Nth Face and co.


----------



## Ves (9 April 2013)

notting said:


> I can't remember a company accepting a takeover bid that is 20% below its last traded price.



I was actually wondering to myself if it is even legal.  How can it be to the benefit of shareholders interests?  It rings of admission of failure to keep the market reliably informed.


----------



## ROE (13 April 2013)

Ves said:


> I was actually wondering to myself if it is even legal.  How can it be to the benefit of shareholders interests?  It rings of admission of failure to keep the market reliably informed.




It's legal they have condition attached....called negative premium...it happened in the past on numerous occasions....that what happen when you on back foot and got nothing to offer...

According to AFR Deal logic recently...

Norfolk Group by RCR Tomlinson, at a negative premium to 
its pre-bid trading price

Redcape Property Fund and Charter Hall Office 
were executed at a negative premium.

In the Asia-Pacific, Dealogic also notes negative 
premiums being proposed in bids for control of 
companies including Japan’s I Metal Technology 
and retailer Daiei Inc.

I reckon their book is very red like Communism Red  I reckon it could collapse so they pretty much offer 
for all their stocks and asset worth and nothing else...

if this take over failed...I definitely think a capital raising is on the card pretty straight away else bankers will step in...either way 60c look good else you looking at sub 30c stock or less if they announce capital raising...

but who would underwrite this risky stuff? they probably need 40%-50% discount for them to game the risk...

52c the market price for a take over at 60c what do u think happen when the take over collapse easily drop sub 40c
then capital raising....dead nail to holder...massive dilution ....


----------



## Uncouth Barbarian (19 April 2013)

Methinks the takeover wont happen. I dont understand how once great companies fall apart like this. No one ever seems to fall on their sword and admit ..Gee whiz we got it wrong.  Looking through the maze of gibberish in company reports today you spot a few clues but you have to look hard for them. What possessed them to buy out so many brands at outrageous goodwill levels about $700 million then suddenly write off most of that under the bean counting term of impairment.  I note one of the brilliant acquisitions for 98 million dollars included a goodwill component of 118 million or thereabouts so that gem was basically 20 million INSOLVENT at the time and I only have secondary schooling to rely on  to make my investment decisions.
If the takeover does not happen it will need fresh capital.  Firstly, the share price will fall, new capital if people are stupid enough to throw it at BBG will dilute holdings and drop the share price further.  The banks could pull the pin.
Closing stores will penalize them millions which they havent got in lease terminations.  Creative bean counting has produced one interpretation that shows BBG to be solvent and worth something.  If I ran  my companies  flying by the seat of my pants they would lock me up and throw away the keys. Listed companies seem to have free reign with little or no consequences. My suggestion.  It has gone past the point of no return. Sell everything off, properties, stock, pay all your bills, liquidate the company and start again with no massive senior executive pay packets.


----------



## VSntchr (4 June 2013)

DOWN 50% on a profit downgrade.

Australian bricks and mortar weaker than expected, America slightly better, Europe remaining weak...

OUCH!

Takeover prospects are over and the company now looking for other refinancing deals....


Looks pretty glum, would be a massive loss of brand power if BBG goes down the toilet...


----------



## prawn_86 (4 June 2013)

Does BBG own any of their stores/real estate? Or is it all leased?


----------



## McLovin (4 June 2013)

McLovin said:


> I've seen a few broker reports floating around with valuations of 30c. That seems a bit overdone to me. My forecast is that we are at or very close to the bottom of the cycle for BBG. If I'm wrong then my 50c valuation looks optimistic. I also think the mid life crisis the main brand is going through is salvagable. Then again, I saw my 60 year old uncle wearing a pair BBG boardies the other day.




May I recant my earlier remarks.

There's obviously something under the bonnet no one likes. Must be those leases.

I'm amazed that it has gotten to this stage where these guys appear to be on the cliff.


----------



## skc (4 June 2013)

skc said:


> Latest EBITDA guidance = $74-$85m in constant currency terms, so say $80m. BTW the guidance went from $130m in Sept to $85-92m in Dec then $74-85m in Mar,* so based on this trajectory it'd be ~$60m come June*




What do you know... 2 trading days into June and we have a downgrade for EBITDA to be $67 to $74m before significant items.

One has to wonder if the brands are not in terminal decline. There were news about key personnels leaving the company (which seems reasonable enough) as no body wants to wait for the restructure if the private equity took them over.

Would someone care to quantify their lease liability? Can you break the lease if there are new tenants to take up your lease (like a simple residential lease here in Australia)?


----------



## ROE (4 June 2013)

skc said:


> What do you know... 2 trading days into June and we have a downgrade for EBITDA to be $67 to $74m before significant items.
> 
> One has to wonder if the brands are not in terminal decline. There were news about key personnels leaving the company (which seems reasonable enough) as no body wants to wait for the restructure if the private equity took them over.
> 
> Would someone care to quantify their lease liability? Can you break the lease if there are new tenants to take up your lease (like a simple residential lease here in Australia)?




Their Lease Liability is their dead nail, they cant get out so badly structure, most retails structure so that if their shop is bleeding money they can close shop and walk, I dont know who negotiating deals when they sign up these lease but they are bad deals for BBG...BBG dont have this luxury they are liable for the entire term even if it bleed cash which they do lot and lot of it each month...

AFR has an article sometimes ago about BBG management when in meeting or negotiating deal they want to end meeting early so they can go surfing  .... 

at this stage it look like a complete wipe out and a re-capitalisation is required....existing shareholder equity will be reduce to next to nothing....

I am surprise people hasnt got out by now at any price..because you end up with nothing soon..I think the banks is now driving BBG ... if they cant recapitalise and get their cash back ....Corporate Grave Yard seem close to certain


----------



## Tyler Durden (4 June 2013)

Given the news today, can't see why anyone would want to buy them. If large corporations have done highly paid for and professional due diligence to come to the conclusion that this ain't worth buying, then why would the average Joe think he could do any better.


----------



## Huskar (5 June 2013)

ROE said:


> Their Lease Liability is their dead nail, they cant get out so badly structure, most retails structure so that if their shop is bleeding money they can close shop and walk, I dont know who negotiating deals when they sign up these lease but they are bad deals for BBG...BBG dont have this luxury they are liable for the entire term even if it bleed cash which they do lot and lot of it each month...
> 
> AFR has an article sometimes ago about BBG management when in meeting or negotiating deal they want to end meeting early so they can go surfing  ....
> 
> ...




Banks are in control for sure - the HY13 report says as much.

Note 9 details that because of the ~$500m impairment charge BBG would have been in breach of its debt covenants. The banks only agreed to amend the covenant on the condition that 80% of total assets are provided as security (although I am not quite sure why all the assets aren't pledged as security...) and 85% of EBITDAI. 

So even if BBG does in fact make ~$70m EBITDA, 85% or ~$60m will go straight to the lenders.

$10m left for shareholders and $110m market cap = 11x EBITDA which still looks not cheap. Very back of the envelope stuff but shows that current valuation probably fair.

What I wonder is what price would make this a good investment? Is it just the debt levels and lease liabilities?

I reckon revenue growth can cover all these sins and more but really can anyone see that round the corner?...


----------



## Uncouth Barbarian (22 June 2013)

Huskar said:


> Banks are in control for sure - the HY13 report says as much.
> 
> Note 9 details that because of the ~$500m impairment charge BBG would have been in breach of its debt covenants. The banks only agreed to amend the covenant on the condition that 80% of total assets are provided as security (although I am not quite sure why all the assets aren't pledged as security...) and 85% of EBITDAI.
> 
> ...




My best guesstimate is the group is worth just under 10 cents a share around $45 million.
That is based upon more than half the retail shops being unprofitable, BB selling costs are twice and up to three times average selling costs of competitors (very high lease costs, no exit strategy from landlords, high staff levels, far too much dead stock not turning quickly enough, far too much product available)
6000 staff spread round the world sales a paltry $1 billion from 600 retail outlets and 11000 retail doors but still better sales ratio to Quicksilver with 45000 retail doors and $2 billion sales.
The group is still salvageable but it needs drastic action NOW to clear bank and other  debts around  $350 million.
Lease liabilities $400 million  ($60 million termination costs which they dont have)
The basic stable of brands is worth very little but they need to sell off everything non core for what they can get and that could be up to $200 million if the analysts have got it right, still a lot less than the $750 million they spent on their expansion madness.
What should be left is a $50 million group with 50 retail outlets, 250 staff, 1 billion in sales with NO DEBT.
It should be able to generate sufficient profits to pay a 10% dividend  $5 million which equates to earnings of $10 million  $0.01 one cent profit in the dollar on sales  and pay out half as dividend.
The company needs to be recapitalised and slowly claw its way back allowing the share price to pick up as profits grow.  IT IS A LONG TERM INVESTMENT....If the banks hold off it could be the turnaround rescue of the century.
Will punters hold out that long.  You dont actually lose until you sell but will shareholders be given the chance to see this company turnaround.  It is too hard for me to call.
That would be my strategy if I were running the show.


----------



## skc (25 June 2013)

BBG announced that those looking to recapitalise the company are still looking.

Share price up 46%! WTF?

The recapitalisation, if go ahead, will probably wipe out existing equity holders.

May be it was the shorts looking to cover and realise their profits before the long re-cap process...


----------



## Huskar (26 June 2013)

skc said:


> BBG announced that those looking to recapitalise the company are still looking.
> 
> Share price up 46%! WTF?
> 
> ...




Crazy price action. But looks like opening up again today as well.

Business spectator also reported that some of BBG's debt holders sold out at 20% below par which shows those in the know aren't comfortable with Billabong's future.

It's looking like being the next Nine - and in that scenario the equity holders did get wiped out completely.

But the major difference with Billabong is their debt load really isn't that large compared to cash flow. Net finance costs were only ~$7m in HY13 so covered ~3.5x by reported EBITDA of $24.7m.

Still there are many off-sheet liabilities not covered in this equation: Nixon's US$175m debt (of which BBG has 48.5%) and the lease liabilities.


----------



## Huskar (26 June 2013)

Short but very informative article in AFR today about their debt: http://www.afr.com/p/business/companies/hsbc_sells_billabong_debt_at_pc_gasawz3KNLPsHkvkh0yKqM.

7 bank syndicate and HSBC has sold out 20% below par.

AFR reports $400m of gross debt expiring July 2014, $400m of off-balance sheet lease commitments and $50m of earn-outs.


----------



## McLovin (26 June 2013)

CBA sold it's debt at 85c/$1 last night.

Given the lease liabilities + outstanding debt, the equity must be worth zero or close to it. If you can buy the debt at 80c you could probably end up owning something that will be worth a bit more in a few years.


----------



## skc (26 June 2013)

McLovin said:


> CBA sold it's debt at 85c/$1 last night.
> 
> Given the lease liabilities + outstanding debt, the equity must be worth zero or close to it. If you can buy the debt at 80c you could probably end up owning something that will be worth a bit more in a few years.




So what's with all this buying of the equity? The only 2 possible explanations are short covering or buying votes ahead of any recapitalisation proposal...

Just don't understand why it needs to be done so aggressively.


----------



## Huskar (26 June 2013)

skc said:


> So what's with all this buying of the equity? The only 2 possible explanations are short covering or buying votes ahead of any recapitalisation proposal...
> 
> Just don't understand why it needs to be done so aggressively.




One thesis: equity has already been discounted so much that it will retain some value in any recap/wind-up and value will fall in the equity. In recap deals it is all about finding where the value waterfall stops: from senior debt to subordinate to preferred stock to equity etc. 

Maybe BBG half-year gives hint when it states that even with breach of covenant only 85% of EBITDA demanded in support of financing facilities. If $10m EBITDA p.a. for equity and ~8x EBITDA valuation gives ~$80m (which is near enough to current price).

Equity seen as an option on any upside. But downside looks pretty bad unless you also hold something higher up in the capital structure.


----------



## McLovin (26 June 2013)

skc said:


> So what's with all this buying of the equity?
> 
> ...
> 
> buying votes ahead of any recapitalisation proposal...




Probably this, although I do wonder whether equity will have any say in the recap. That being said in terms of equity this is a microcap now, even a 45% move in the SP price was only ~$30m and has changed the EV by <5%. I guess that makes it small change, especially if you're buying the debt at a 20% discount to face value. And you end up with some element of control if equity still does exist.


----------



## skc (26 June 2013)

Huskar said:


> One thesis: equity has already been discounted so much that it will retain some value in any recap/wind-up and value will fall in the equity. In recap deals it is all about finding where the value waterfall stops: from senior debt to subordinate to preferred stock to equity etc.
> 
> Maybe BBG half-year gives hint when it states that even with breach of covenant only 85% of EBITDA demanded in support of financing facilities. If $10m EBITDA p.a. for equity and ~8x EBITDA valuation gives ~$80m (which is near enough to current price).
> 
> Equity seen as an option on any upside. But downside looks pretty bad unless you also hold something higher up in the capital structure.




Given that debt is changing hands at 80/85c in the dollar, it's pretty hard not to conclude that there's no value left in equity. A recap plan may give some token share of the recapped company to the existing holders. I remember the old BBI (Babcock and Brown Infrastructure) recap saw existing equity diluted to something like 0.06% of the new structure. They even rubbed it in by rounding it down to 0% in one of their announcement! 



McLovin said:


> Probably this, although I do wonder whether equity will have any say in the recap. That being said in terms of equity this is a microcap now, even a 45% move in the SP price was only ~$30m and has changed the EV by <5%. I guess that makes it small change, especially if you're buying the debt at a 20% discount to face value. And you end up with some element of control if equity still does exist.




I seem to remember that in certain company structures, the equity holders can choose to sink the ship or accept a recap... BBI above and Centro came to mind. 

Well 30m shares changed hands at ~15.72c VWAP yesterday so it costed ~$5m. That's quite a lot of money relative to the size of the debt.


----------



## Uncouth Barbarian (26 June 2013)

skc said:


> Given that debt is changing hands at 80/85c in the dollar, it's pretty hard not to conclude that there's no value left in equity. A recap plan may give some token share of the recapped company to the existing holders. I remember the old BBI (Babcock and Brown Infrastructure) recap saw existing equity diluted to something like 0.06% of the new structure. They even rubbed it in by rounding it down to 0% in one of their announcement!
> 
> 
> 
> ...




I think equity is almost reduced to zero.  With $412 million in lease committments, another $400 plus million in loans, and deferred payments and total liabilities circa one billion dollars and trading losses the ability to turn it around is slipping away.  They need to sell everything they can to clear interest bearing debts and avoid receivership.
With two of the seven banks selling down loans at a discount and the others will follow it is the time for Launa to seek relief and forgiveness of some debt.  The lenders have clearly shown they expect not to receive  100 cents in the dollar on loans and are willing to settle for 15-20% and possibly more discount to distance themselves from complete anihilation should it collapse completely. HSBC took a $4 million loss on $20 million and CBA  $10 million on $65 million. That augers well for perhaps a further $60 million plus relief on the remaining $300 million and subsequent interest payments as well.
If PE advance funds to refinance it wont be for free and will certainly attract an additional 4-5% premium over current bank interest rates which is ludicrous when they are struggling with lower interest rates, why would you risk paying so much more when you are unprofitable right now.
They need to sell everything NOW, shops, properties, most brands  and pay off debts, and start again.
If they had followed my advice and got the shops profitable they could have sold shops, stock, leases and staff  would be off balance sheet. Instead, they have chosen to close shops, discount stock below cost, pay staff redundancies and pay massive exit costs on broken leases.  Another error of judgement.
It was and still maybe fixable but time is rapidly running out.

It is like watching your football team get slaughtered and the coach does nothing as the clock counts down to game over.....Come on coach......make some moves.......


----------



## McLovin (27 June 2013)

skc said:


> Well 30m shares changed hands at ~15.72c VWAP yesterday so it costed ~$5m. That's quite a lot of money relative to the size of the debt.




If you include the leases (and I'm not sure how easy it is to wriggle out of those) then it's a small fraction (<1%). There's probably also a few retail punters who see that the sp is "cheap". I guess we'll know in the next couple of days when/if the holder interest notices start coming in.

Basically, my point is that a couple of days ago the company had an EV of ~$700m (debt ~$240m (at 80%) + lease liabilities $400m + mc $60m). Even now the EV has only changed marginally to ~$730 If what you said is true and equity can either sink the ship or recap it, then it seems like small change in order to end up with some form of control, or at least being at the table. That would seem to be the only value left in the equity.


----------



## Huskar (27 June 2013)

McLovin said:


> If you include the leases (and I'm not sure how easy it is to wriggle out of those) then it's a small fraction (<1%). There's probably also a few retail punters who see that the sp is "cheap". I guess we'll know in the next couple of days when/if the holder interest notices start coming in.
> 
> Basically, my point is that a couple of days ago the company had an EV of ~$700m (debt ~$240m (at 80%) + lease liabilities $400m + mc $60m). Even now the EV has only changed marginally to ~$730 If what you said is true and equity can either sink the ship or recap it, then it seems like small change in order to end up with some form of control, or at least being at the table. That would seem to be the only value left in the equity.




AFR this morning comes up with a SP value of 30c based on EV/earnings of 5.3x - but of course does not include lease liabilities in that equation..


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## skc (16 July 2013)

Recap announcement out. I am thoroughly confused... 

Bridging loans, long term loan, asset sale, interest in cash, interest PIK, options, RPS, convertible loans. They can print the whole recapitalisation proposal and call it an Advanced Corporate Finance textbook.

From what I've seen, a few things jump out at me.

1. After all the dilution, Altamont will hold up to 40% of the company, and existing holders will still own ~60%. That is not a bad number for a major on-the-brink recap.

2. The options issued (which will ultimately be ~10.5%) have a strike of 50c. That's ~2x today's closing price.

3. All the debt are quite expensive. Even in the long term financing scenario, there's $200m base committment @ 12% (7% cash, 5% paid in kind (I assume that means shares rather than boardshorts)). Then there's upsize committment of $54m @ 10% cash. Convertible note of $40m is also 12% (7% cash, 5% PIK). Lastly there's a asset-based revolving credit facility of up to $160m @ base rate + 2%. 

Can anyone do some sort of valuation around BBG's fully diluted equity?

My immediate guess is that BBG will jump up on open tomorrow, as it is no longer on the brink of collapse and any shorts will probably run for cover.


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## Tim Canberra (16 July 2013)

I think the trading halt lasts until Thursday. Anyone want to guess what the price might climb or dive to?


----------



## Huskar (19 July 2013)

So interesting to watch this. And as you say SKC a perfect case example for a Corporate Finance textbook.

Oaktree seem real peeved that they have missed out on an equity stake, although of course they will still make a ~15% return in a matter of months. 

The uncertainty = real opportunity in my opinion


----------



## Buttsie (2 September 2013)

+21% at time of typing. Crazy crazy movement on this stock


----------



## beargggrrr (4 November 2013)

I'm hearing some positive things on BBG. Apparently out their structural issues, have solid backing and are well positioned for their next phase. Has anyone else heard anything?


----------



## blaz0430 (20 January 2014)

how does everything think billabong is going?


----------



## tech/a (9 September 2014)

BBG absolutely cracking along.
Technically looks very bullish.
Will post a chart tonight.


----------



## notting (9 September 2014)

Cool, thanks for the heads up.
Guess we should wait to see what it does when if it decides to retest that break at .68
And probably .60


----------



## tech/a (9 September 2014)

notting said:


> Cool, thanks for the heads up.
> Guess we should wait to see what it does when if it decides to retest that break at .68
> And probably .60




If it does!


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## tech/a (9 September 2014)

My technical view of BBG.

*Click to expand*


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## notting (26 February 2015)

Glad I was not on my computer at the start of trade today.
Was short this and would not have enjoyed the opening bounce.  Although I do normally wait till around 12.30 to see if it is going to stay.
Big outside bar, finishing on it's lows is often negative but, still sitting above support so.
May just follow the market.


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## Mindfultrader (4 March 2015)

A few thoughts here on Billabong for anyone interested.






Cheers!


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## pitpan22 (27 November 2015)

*BBG shares*

Hi there, I was just wondering if anyone could please let me know what ´s happening to BBG shares right now. On my trading platform BBG shares are not listed any more and the same goes for my portfolio. 
Any help would be highly regarded.
Cheers


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## peter2 (27 November 2015)

Capital Management - Security Consolidation


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## System (30 April 2018)

On April 26th, 2018, Billabong International Limited (BBG) was removed from the ASX's official list in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement by which a subsidiary of Boardriders, Inc has acquired all of the issued shares in the Company.


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