Northwest Zumiez bids for West 49
Washington-based action sports retailer Zumiez is making a bid for Canadian retailer West 49 a week after Billabong announced it is acquiring the company. Zumiez has offered to pay “an excess of $1.30 per share.” Billabong’s offer is for $1.30 for share. However, West 49′s board believes Zumiez bid could lead to a superior proposal. But, since Zumiezrecently said it planned to expand into Canada, West 49 wants to “protect its competitive position.” According to a release, it will talk to Zumiez to determine if the offer can become a firm offer that is superior to Billabong’s. If Zumiez does that, West 49 says Billabong will have the right to match it within five days. However, the board still supports Billabong’s bid and believes it is in the best interest of shareholders, according to a statement. Billabong has said it will finance the acquisition, valued at $99 million Canadian, with its existing credit facilities. At its last reporting period, Billabong had approximately AUS$225 million in net debt (cash minus short and long term borrowings). West 49 said Zumiez offer is not subject to a financing condition either – meaning it would not need to obtain new loans. Zumiez had $96.8 million in cash and no debt at the end of the last reporting period. Zumiez had considered other acqusitions in the past few years. After Active Ride Shop filed for bankrutpcy in 2009, Zumiez explored buying the chain, and 20 of its stores (Active currently operates 21 stores). However, after conducting its due diligence, Zumiez did not make a formal bid during the final auction. West 49 operates 138 mostly mall-based stores. Zumiez operates 389 mostly mall-based stores in the U.S. Billabong owns approximately 372 stores around the world. Read previous interviews with Billabong North America President Paul Naude and West 49CEO Sam Baio about Billabong’s proposed acquisition of West 49.
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