Billabong surges on acceptance of Boardriders’ takeover offer

As a move to tackle the high debt-ridden scenario and risks relating to the state of the global retail market, Billabong International Ltd (ASX: BBG) has accepted a $1 per share cash takeover offer from Oaktree Capital Management’s Boardriders under the proposal made last year. The group has entered into a Scheme Implementation Deed with Boardriders under which Boardriders will acquire all of the shares in Billabong.

The shareholders are offered with an attractive premium through the deal (28% to Billabong’s closing price of $0.78 per share on 30 November 2017) that represents an implied enterprise value (EV) of A$380 million. Further, the transaction will imply EV/pro-forma FY17 earnings before interest tax depreciation and amortisation, excluding significant items (EBITDA) multiple of 7.4x and an EV/pro-forma FY17 EBIT multiple of 16.6x. Oaktree, which is one of Billabong’s two senior lenders, already has 19% of stake in Billabong. It is worth noting that Centerbridge and Gordon Merchant are supporting the deal. Expected to be implemented in April this year, the scheme will be open to Billabong shareholders for voting purposes in March 2018.

BBG targets to have its 2017-18 EBITDA (excluding significant items) to be between $51.1 million and $54 million with an earnings profile that is similar to FY17, while first half EBITDA will be below the prior corresponding period as performance is skewed to the second half. BBG expects better earnings from Americas and Europe regions.

BBG stock surged up 2.6% on January 05, 2018 with the news.
 
BOD Australia surges on cannabis deal

Natural cosmetics’ developer and distributor, Bod Australia Ltd (ASX: BDA) entered into an exclusive manufacturing and commercialisation agreement with Singapore Stock Exchange listed, specialty pharmaceutical company, iX Biopharma Ltd for supplying medicinal cannabis extracts to iX Biopharma for enabling iX Biopharma to create a unique natural medicine product delivered on iX Biopharma’s proprietary WaferiX^TM technology for use in the Company’s Phase I Clinical trials. BDA had earlier signed a supply agreement with Swiss botanical extracts manufacturer Linnea Natural Pharma Solutions to develop cosmetics and therapeutic products using standardised, GMP-certified cannabis extracts.

BDA stock moved up 7.5% on January 05, 2018 and is spiking to high trading levels at the back of recent sector driven movements and company-wide developments.

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