In this image released by the Association of Surfing Professionals, Michel Bourez, of Tahiti, rides wave during the Billabong Pro Santa Catarina surfing competition in Imbituba Brazil.Kirstin Scholtz
Pretty much nobody pops a deal heading into a long weekend, but maybe it's appropriate for beachwear retailer West 49, which agreed to a takeover by Billabong of Australia.
It's a hefty premium for a stock that hasn't been nearly as cool as the company's clothes (and judging by recent sales performance, the clothes aren't as cool as they once were either).
Add that to a lockup agreement for the biggest shareholders, it's hard to see much of a bidding war coming on for West 49. Early bids for the shares show it opening Wednesday right at the Billabong price of $1.30 a share, a substantial premium to yesterday's close of 55 cents.
It's not hard to see how that kind of payout would appeal to the company, given that West 49 was a $2 stock back in 2005 but has been in a long slide that was only recently arrested, and earnings have been skinny. Same store sales were down in West 49 banner stores by 3 per cent, and margins tighter. That resulted in a $2.6-million loss.
National Bank Financial advised the special committee of West 49's board, while Goldman Sachs was on for Billabong.