A couple of major players in the retail landscape down under changed hands last week. In Australia, it was Rebel Sport Limited that entered into an agreement with a wholly owned subsidiary of Archer Capital Pty Ltd; while in New Zealand, surf retailer Amazon agreed to be purchased by Billabong.
In the Rebel Sport deal, an entity nominated by Archer will acquire the shares of the retail chain for a price of $4.60 per share. As usual, the agreement is subject to certain closing conditions including the completion of due diligence investigations.
On September 1, 2006, shortly after the company released its 2006 financial results, Rebel shares traded at $3.34, meaning that the price offered by Archer represents a premium of 28% over that value and a multiple of 16.8x 2006 net profit after tax.
The agreement that has been signed contains provisions for break fees to be payable by Archer or Rebel under certain conditions. Rebel has granted a period of exclusivity to Archer to complete due diligence investigations and put a binding offer to shareholders.
According to Rebel, the other conditions of the agreement remain confidential, conditional, and non-binding, and are not yet in a form capable of being put to shareholders.
In the country next door, Billabong International Limited has agreed to purchase the New Zealand-based Amzaon surf retail chain. According to Billabong, the 19-store chain is New Zealands largest surf retailer. Billabong management said the purchase was expected to be slightly earnings per share positive in the year ending June 30, 2007.
Amazon was founded in 1990 and comprises eight stores in Auckland, four in Wellington, five in Christchurch, and one each in Queenstown and Dunedin.
