A federal bankruptcy judge cleared the way Thursday for a takeover of Quiksilver Inc. by the private equity firm Oaktree Capital Partners LP, while leaving the door open for superior offers.
In his ruling, Judge Brandon Sharp also struck down a $20 million breakup fee Oaktree had sought as a condition of its refinancing plan, which revolves around forgiving $175 million in Quiksilver debt acquired by Oaktree and investing $115 in equity capital in exchange for control of the company, BankruptcyNews.com reported. An Oaktree executive told Sharp the company is willing to proceed with its plans for Quiksilver without the breakup fee, according to the news service, which is owned by Dow Jones Inc.
The ruling came after a two-day hearing in which Quiksilver’s creditors pushed a competing offer from Brigade Capital Management. While the judge’s ruling leaves the door open for Brigade’s offer and that of other bidders, it rejected creditor’s arguments that Quiksilver had not done enough to improve on Oaktree’s refinancing offer.
The judge set a Jan. 25 date for a final confirmation hearing.
During the hearing an investment banker Quiksilver has hired to broker a sale testified that Oaktree might ultimately opt to combine Quiksilver with rival action sports company Billabong International of Australia, according to a report by Bloomberg. In 2013, Oaktree helped rescue Billabong by helping arrange nearly $500 million refinancing package that left Oaktree with a 19.2 percent stake in Billabong. While Oaktree retains its stake in the company, it relinquished its last seat on Billabong’s board in August to avoid a conflict of interest with its investment in Quiksilver.
