A shareholders' rights group has taken aim at Billabong's planned recapitalisation deal, arguing competing offers for the surfwear icon should be considered.
Billabong last week announced it had reached a $US294 million ($A325 million) deal with US private equity group Altamont Capital Partners which will allow it to repay its debts.
Altamont is expected to take a stake of up to 40 per cent in the company under the deal.
But two of Billabong's main creditors, Centerbridge Partners and Oaktree Capital, have lodged a challenge to the deal with federal regulator the Takeovers Panel.
The challenge centres around a 35 per cent interest rate levied on a $A44 million convertible loan held by the company, which will be charged until shareholders approve the deal, and a reported $A65 million break fee which Billabong will have to pay if it scraps the deal with Altamont.
The panel has yet to decide whether to hold hearings into the matter.
Australian Shareholders' Association chairman Ian Curry on Sunday said the panel should declare the break fee to be "unacceptable".
The panel had previously said break fees should not equate to more than one per cent of the equity value of the transaction, he said.
"ASA is not currently a party to the proceedings, but we are concerned by media reports about the break fee and urge the Takeovers Panel to declare it to be 'unacceptable'," Mr Curry said in a statement.
Centrebridge and Oaktree have submitted their own refinancing proposal which involved them taking a 61.2 per cent stake in Billabong, but their offer has been rejected by the company's board.
Mr Curry wants the Billabong board to take whatever steps are necessary to ensure an orderly and competitive process that allows shareholders to consider alternative proposals to the Altamont deal.
"Billabong shareholders have suffered enough at the hands of a board and management team which have imperilled the company," he said.
"At the very least, the board should facilitate a truly competitive auction so that all serious bidders can lodge their best offers."
Shares in Billabong have risen sharply since the Altamont deal was announced, jumping from 25 cent to 40 cents between Wednesday and Friday.
The company has been subject to a string of takeover attempts in recent years as it tries to combat weak revenues and high debts.
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