UPDATE 2-West 49 says Zumiez ready to top Billabong’s offer

* Zumiez mulls topping Billabong’s C$1.30/shr offer

* West 49 shares jump over 13 percent

* Potential Zumiez offer seen as “expensive”

(Updates with analyst comment, details, share price)

By Solarina Ho

TORONTO, July 9 (BestGrowthStock) – Canada’s West 49 (WXX.TO: ) said
on Friday Zumiez Inc (ZUMZ.O: ), a U.S.-based teen sports apparel
retailer, was prepared to top Billabong International Ltd
(BBG.AX: )’s offer for the company, sending its shares sharply
higher.

Last week, Australian clothing retailer Billabong offered
to buy West 49 for C$83.2 million ($80.1 million), or C$1.30
per share, in cash, aiming to expand in the North American
market for surfing and skateboarding gear. [ID:nSGE65T0EB]

A Zumiez offer, subject to a satisfactory due diligence
review, would have no financing conditions and could lead to a
superior formal bid, West 49 said in a statement.

Zumiez could not be immediately reached for comment on
whether it would make a bid for West 49 or what price is
willing to offer.

Billabong’s offer was a 136 percent premium at the time.
Since then West 49’s shares have more than doubled in value.

“Where were these guys a month ago? All of a sudden you’ve
got a high premium over where the stock was trading and these
guys look like they’re ready to fight it out. So it’s curious
from that standpoint,” said Neil Linsdell, an analyst with
Versant Partners.

Zumiez and West 49 are similar multi-brand action sports
retailers and both sell Billabong products.

“I’m not quite sure what their relationship is like for
them to go against one of their suppliers in the bid,” said
Linsdell. He said the situation was interesting, but that
without a firm offer, it was too early to speculate further.

West 49 shares jumped 9.4 percent to C$1.39 on the Toronto
Stock Exchange, while Zumiez shares fell 2.2 percent to $17.47
in New York.

“We believe this morning’s news is a net negative (Zumiez)
in the near-term given the likely dilutive earnings impact and
expensive price tag,” Jefferies & Co. analyst Randal Konik
wrote in a research note.

Konik said an offer above Billabong’s “appears rich in this
environment and would be a premium to where specialty retail
deals have priced in the past.”

West 49 said its special committee intends to determine if
Zumiez’s offer can become a “firm offer that is financially
superior to the transaction with Billabong,” in which case
Billabong would have to match the proposal within five business
days.

(Additional reporting by Savio D’Souza in Bangalore)

($1=$1.03 Canadian)

(Reporting by Solarina Ho)

UPDATE 2-West 49 says Zumiez ready to top Billabong’s offer