Buyout firms battle it out for struggling surfwear brand Billabong

Bain Capital, the private equity giant formerly run by the US Republican presidential candidate, Mitt Romney, is trying to buy the once-hip Australian surfwear brand Billabong.

Bain has made an offer of A$694m (£445m) for Billabong, which has already received a similar approach from another private equity firm, TPG Capital.

Billabong indicated that it felt the offers undervalued the company but said it was beginning negotiations to see if a deal could be reached.

The shares rose almost 8 per cent to A$1.37. However, that was still below the $1.45 price that has been offered by the bidders.

"It puts the pressure back on the board. Maybe they should consider it," David Spry, research manager at Australian broker FW Holst, told Reuters. "It's a tired brand."

Billabong's sales have fallen about 75 per cent in the last 18 months.