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Australia's Surfstitch says MD quits to pursue buyout

Published 10/03/2016, 12:04 pm
Updated 10/03/2016, 12:10 pm
© Reuters.  Australia's Surfstitch says MD quits to pursue buyout
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SYDNEY, March 10 (Reuters) - Australian online clothes retailer Surfstitch Group Ltd SRF.AX on Thursday said its managing director quit and it planned to take the A$380 million ($284 million) company private just 15 months after listing on the sharemarket.

The former unit of Billabong International Ltd BBG.AX said Justin Cameron, who founded Surfstitch in 2008 and led it through an initial public offering in December 2014, quit all his roles at the company, effective immediately.

"The company understands Mr Cameron is pursuing an opportunity relating to a potential acquisition of the company in conjunction with private equity," it said in a statement. It did not name any private equity firm and noted that it had not received any offer.

Surfstitch said it would assess any proposal on its merits.

The Sydney-based company's shares surged 17 percent to A$1.39 in their biggest single-day gain since listing, although they were still well short of their A$2.13 peak.

After Australia recorded its biggest year of IPOs by total value in 2014, several companies involved in that rush, including Surfstitch, have seen their shares falter as earnings failed to match expectations.

In its half-yearly earnings announcement last month, Surfstitch abandoned its full-year guidance because it was spending more than expected on a new strategy of creating content to market its wares, sending its share below their A$1.00 issue price for the first time in a year. = 1.3392 Australian dollars)

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