Oaktree Capital Management LP is exploring merging Quiksilver Inc. with Billabong International Ltd., an investment banker told a judge overseeing Quiksilver's Chapter 11 bankruptcy proceeding Wednesday, according to a report by Bloomberg.
Bloomberg reported that a judge in Delaware was told of the development on Wednesday. Durc Savini, an investment banker at Peter J. Solomon Co., testified on behalf of Quiksilver that Oaktree “at some point” may combine the companies if it’s able to take over control of Quiksilver following the bankruptcy. Quiksilver owns Quiksilver, Roxy and DC.
Oaktree acquired a 19.2 percent stake in Billabong in September 2013 after it and another private equity firm persuaded the Australian action sports company's board to abandon a rescue package it had negotiated just two weeks earlier.
Quiksilver is in court defending its proposal to borrow as much as $175 million from Oaktree and Bank of America Corp., part of a broader plan to have Oaktree covert its debt into equity and assume control of the company. A competing offer has come in from Brigade Capital, which is supported by Quiksilver’s unsecured creditors.
