According to a recent article in The Australian Financial Review, there is a chance that we might see the formation of an unlikely alliance between Billabong and Quiksilver International.
Writing for the AFR Sue Mitchell stated that, “The largest shareholder in Billabong International could emerge with almost full control of arch rival Quiksilver if the now-US based surf and skate wear retailer emerges from bankruptcy.”
The shareholder in question is Oaktree Capital Management, a US-based private equity firm that currently owns 18.7 % of Billabong International. If Quiksilver International kicks out of the bankruptcy blues then Oaktree looks set to take control of more than 90 per cent of its shares. It’s important to note that the deal pertains to the Quiksilver International arm of the company. Quiksilver Europe and Quiksilver Asia Pacific, which includes Australia, were never forced to file for bankruptcy.
Since it was hinted at last September Quiksilver and Billabong management have played down the potential merger, which seems like the surf industry equivalent of IBM and Macintosh combining forces. While it’s difficult to formulate a picture of the practical ramifications for each of the brands, but just once wouldn’t you love to see a shirt released with the logo QuikBong?
