This is kind of fun. As you’re aware, TPG Capital offered to buy all of Billabong for $3 a share before the Nixon deal and other steps were announced. Billabong said no because the deal was contingent on too many things and they needed an immediate, certain solution to their short term balance sheet issue. But now, even with the Nixon deal happening, TPG still wants to buy them for $3.00 a share. What can we learn from that?
First, I guess we can conclude that TPG approves of the actions Billabong management has taken. And apparently they agree with Billabong management that the earnings lost from the sale of half of Nixon will be made up for by store closings and expense reductions being undertaken.