Bain back out of Billabong buyout
As reported earlier in the week, Mitt Romney’s very own Bain Capital pitched an indicative bid of $1.45 a share for Billabong in order to be granted access to the company's accounts.
However, following presentations from Billabong chief executive Launa Inman and chief financial officer Craig White in Los Angeles last week, Bain has today announced that it is unable to make the numbers stack up and go ahead with the takeover.
Shares dived 12.5c to $1.32 following the news, the lowest price since the company announced that a rival bidder had emerged two weeks ago.
All is not lost however, Billabong said yesterday it would persist with a formal sale process with potential buyer TPG, which first offered $1.45 a share in July and is continuing to conduct due diligence scrutiny of the company’s accounts.
“The board of Billabong reiterates there is no guarantee that, following this formal process, a transaction will be agreed or that the board will recommend any proposal,” the company said in a statement to the Australian Securities Exchange.
Billabong has previously said the offer did not reflect the company's true value in the context of a change of control, but hoped the offer “may be refined with the benefit of due diligence”.
The top line price is likely to take a blow following the Bain Pull out; having removed any chance of a bidding war between two or more potential buyers, with little other interest being shown at this moment in time.
TPG has made its offer conditional on unanimous approval from the Billabong board, suggesting it will need to sweeten the deal, which must also be approved by a minimum 50 per cent of shareholders with at least 75 per cent of the stock.
UBS estimates a private equity buyer could pay as much as $2.03 per share for Billabong and still make a 15 per cent annual return, but considered an offer of between $1.60 and $1.70 more likely.
TPG has already signed up major Billabong shareholders Perennial and Colonial to sell their respective stakes of 13.7 per cent and 10.6 per cent into the offer, and proposed allowing company founder Gordon Merchant to keep his 17 per cent stake.
Merchant was instrumental in the company's rejection of TPG in February, declaring that he would not sell even if the price was raised to $4 a share.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.