Billabong founder Gordon Merchant faces wave of protest as Gina Rinehart fires another shot at Fairfax

Billabong founder Gordon Merchant and the board of the stricken surfwear giant have faced intense questioning from shareholders about why a bid to buy the company at $3.30 a share was rejected, and why a second bid at $1.45 a share also collapsed.

But Merchant has retained his seat on the Billabong board, despite a number of big institutional shareholders voting against his re-election. He ended up getting the support of 68% of shareholders, suggesting a large protest vote.

Annual general meeting season is one of the few occasions where directors have to face rank-and-file shareholders – and after a year in which many companies have underperformed, the rank-and-file wants its questions answered.

And Billabong shareholders – who have seen the stock fall from as high as $17 to just 86c in the last five years – had plenty of questions, mostly around the collapse of the two takeover bids, both of which were made by private equity firm TPG.

The first bid, at $3.30 was made in February and collapsed after Merchant and another director, Colette Paull, wrote to the Billabong board telling them they would not entertain a bid below $4.

Outgoing chairman Ted Kunkel rejected the idea that Merchant and Paull's letter had scuttled the first bid, saying the view that Billabong was worth more than $3.30 a share was held by the entire board.

Thankfully for investors, several members of that board who got this call so wrong are now on their way out.

The second bid at $1.45 collapsed just weeks ago after TPG decided to walk away. That has left the market wondering what TPG saw in Billabong's books that so worried them. Worried investors put this question to Kunkel yesterday.

"Their reasons for their withdrawal are their own, and Billabong is not going to speculate on their reasons," Kunkel told the AGM.

"Following due diligence, no new information came to the company."

Investors have no other option now than to hope new CEO Launa Inman can lead the company's turnaround or find another potential bidder.

The other big AGM of the day was Fairfax Media, which has emerged from a horrible winter that saw the company post a loss of $2.7 billion and announce it would cut 1,900 jobs, including more than 300 from its editorial divisions.

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