Friday, September 21, 2012
A Star News Group publication
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Rip Curl ‘best bet’ for investors, says analyst Publicly-listed Billabong was reported to have recently rejected a bid from private equity company TPG for $1.45 a share, or US$700 million, after a valuation of $1.7 billion 12 months earlier. Billabong, founded in Queensland, has struggled with a falling share price over the past few years. Mr Volkov said Rip Curl selling first would “seriously derail” Billabong’s search for investors. He warned international investors they could damage the Rip Curl brand if they moved its Torquay headquarters overseas. “A big part of Rip Curl’s identity is based on the fact that it was founded and based in Torquay. “The best strategy for investors would be to inject funds into the business and continue developing the brand here and overseas.” A former Rip Curl manager said any sale would be “understandable” because Mr Warbrick and Mr Singer had “semi-retired” about a decade ago. The company’s board had failed to identify successors to take over, he said. He hoped a sale or a new investor would provide a boost for the brand while keeping it in Torquay. The company’s iconic Rip Curl Pro at Bells Beach during Easter could help keep the company’s headquarters in Australia, he said.
For sale: Rip Curl’s Torquay headquarters and retail complex this week.
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BY CHERIE DONNELLAN TORQUAY’S Rip Curl could be “more enticing” to overseas investors than rival Australian surfwear company Billabong, according to a strategic business marketing analyst. Deakin University’s Michael Volkov said Rip Curl was likely to have greater appeal for its “brand equity” advantage. “Rip Curl’s a brand that’s known to be tied to its surfing roots,” Mr Volkov said. “It’s relatively small scale (compared to Billabong) but it’s successful. “Because of its size, it wouldn’t need a restructuring of management.” The privately-owned company confirmed this week it was considering selling after “unsolicited approaches” from international organisations. The company said it had hired Bank of America Merrill Lynch to “[explore] the opportunities [and assess] the merits of introducing a third-party investor to the group”. Prospective investors would have to adhere to Rip Curl’s “company values” before making any deals. Rip Curl recently forecast increased 2013 earnings of $48 million, up from $41 million. Media reports said Rip Curl’s owners wanted US$500 million. Torquay’s Doug ‘Claw’ Warbrick and Brian ‘Sing Ding’ Singer own 72 per cent of the company, which they founded in 1969.
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