Billabong has received a merger proposal from the owner of the Quiksilver and Roxy brands that values the surfwear retailer and wholesaler at about $200 million.
The embattled surfgear merchant says it has received a confidential, indicative and non-binding proposal from Boardriders - whose majority owner Oaktree Capital already has a 19 per cent stake in Billabong.
The scheme of arrangement values Billabong shares at $1 each, 22 cents above Thursday's closing price.
Shares in Billabong closed 17 cents, or 21.8 per cent, higher at 95 cents on Friday.
Billabong says it has opened its books for due diligence, however, there is no certainty that the indicative proposal will result in an offer for the company.
The due diligence process is expected to take a number of weeks and the proposal is subject to a number of conditions, including a definitive agreement between the parties, and shareholder and court approvals.
The Gold Coast-based retailer recorded a $77 million loss in the 2017 financial year, worse than the previous year's $24 million loss.
Contributing to the disappointing result were total impairment charges of $106.5 million, including the discontinuation of the Tigerlily swimwear brand, and a fall in revenue.
Billabong has been subject to a number of takeover bids in the past, including bids from US private equity groups TPG and Sycamore during the 2013 financial year when its annual loss swelled to almost $860 million, largely due to writedowns on goodwill and brands.
