Economy

Billabong shares fall on takeover concerns: Midday roundup

Patrick Stafford /

Shares in surfwear group Billabong have fallen 8% this morning over new doubts about the company’s latest takeover offer from former executive Paul Naude.

Billabong had previously said it would meet with a consortium led by Naude about the bid, which valued the company at $1.10 per share.

In a statement to the ASX, Billabong confirmed the bid – its fifth for the year.

“Media reports named the relevant parties and the proposed price this week,” Billabong said in the statement. But in a key statement, it noted the confidentiality of the deal was key to its success, raising doubts among investors it could even go ahead.

United States to vote on fiscal cliff bill

The United States Congress is set to vote on a bill that would potentially avoid the country’s so-called fiscal-cliff disaster scenario.

Majority leader in the House of Representatives, Eric Cantor, told Reuters he expects a vote on the legislation to come within days.

However, this comes just after Republicans have reportedly rejected the latest offer from the White House. The debate is ongoing in order to avoid a range of tax hikes and spending cuts that will occur by default if a deal isn’t made.

Some progress has been made – President Barack Obama has agreed on a compromise on the tax threshold issue and Republicans have agreed to higher taxes for high income earners.

The latest plan would raise taxes on those earning above $400,000, instead of Obama’s proposal of $250,000.

Shares up on continued US optimism

The Australian sharemarket has opened higher this morning, following a solid night in the United States where investors remain optimistic about the fiscal cliff debate.

The benchmark S&P/ASX200 index was up 22 points or 0.5% to 4618.0 at 12.00 AEST, while in the United States the Dow Jones Industrial Average rose 115 points or 0.9% to 13,351.

 

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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