Billabong International Trades 36 Percent Above IPO Price

Burleigh Heads, Australia — Billabong International Ltd. debuted 36 percent above its initial public offer price last week, as it looks to expand in the $1.2-billion a year U.S. surfwear market.

Queensland state-based Billabong last Monday priced its shares in the IPO at A$2.30 for retail investors and A$2.60 for institutions. It sold 120.4-million shares, or about 60 percent, of the company, with about half going to retail investors. The stock rose A$0.83 to A$3.13, giving the company a market value of A$600-million ($353 million). It had reached a high of A$3.24.

“Increasingly the market will re-rate and view Billabong in terms of a high-return, international branded distribution company,” said Frank Villante, who bought Billabong shares for the A$900 million fund he helps manage for BT Funds Management Ltd. “Eighty percent of their revenue is outside of Australia — it’s a fairly unique Australian company.”

Billabong expects surf wear sales to rise 47 percent to A$330.6-million in the year ending June 2001, a prospect supported by A$100-million in advanced orders. About half its sales are generated in the U.S.

The company has forecast earnings before interest and tax to grow 76 percent to A$66.7-million in fiscal 2001.

Billabong appointed Gary Pemberton, as non-executive chairman. Pemberton is chairman of Qantas Airways Ltd., TAB Ltd. and a director of Rio Tinto Ltd., the world’s second-biggest mining company.

“The main issue for us will be growing offshore,” said Pemberton, adding the company has recently introduced ladies wear into the U.S. market.

Billabong founder Gordon Merchant sold half his 50-percent stake in the company in the IPO.

Macquarie Corporate Finance, a division of Macquarie Bank Ltd., advised Billabong on its IPO.

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