IF IT wasn't so serious, yesterday's announcement by Billabong that private equity group TPG had pulled out of its non-binding offer would verge on the farcical.
But it is serious, as shown by the share price closing at at 83.5¢ yesterday; TPG's non-binding offer was $1.45.
Both parties are tight-lipped about why TPG pulled out, leaving investors whispering in the dark about what on earth prompted two private equity groups to withdraw from non-binding conditional offers within weeks of each other, without an adequate explanation.
Was it the stock, the US sites, or something else? Was it a difference on price, or maybe something related to the private equity groups?
Markets hate uncertainty and yesterday morning's announcement by Billabong has created a breeding ground for uncertainty.
TPG informed Billabong chief executive Launa Inman, who held a snap press conference. Unfortunately for shareholders, she said absolutely nothing. ''They gave no indication,'' she said.
But she added that TPG commented how helpful the Billabong team had been during the due diligence process and that they believed the transformation strategy was going well.
TPG was equally evasive, its statement said in part: ''Board and management were very constructive … and laid out a credible performance improvement plan but, ultimately, TPG has decided to withdraw from the process.''
But there is another serious issue to be considered by boards. At what point should they open their doors when approached with a non-binding and conditional takeover offer, particularly by way of a scheme of arrangement?
The lesson here, and in the case of Pacific Brands with KKR, is that the boards of both companies felt they had no choice but to let the private equity players in to do due diligence. If they had ignored them, they would have been stung by the wrath of investors. But by letting them in, they gave parties access to the business, which was distracting, only to see them walk away.
In the case of TPG, it was given an even greater incentive with two key shareholders, Perennial and Colonial, agreeing to sell them their shares. That is now up in smoke.
While TPG has spent the better part of a year looking at Billabong, off and on, it is still a case of all care and no responsibility and it does throw open the debate on when to allow due diligence.
Investors are now back to square one. Ms Inman says her strategy will provide ''a clear pathway to unlocking the inherent value''. The problem is investors are left wondering what that inherent value might be.
Billabong is trying to scramble its way out of a crisis. Its shares have fallen from a peak of $17. The latest debacle will only add to the serious issue of staff morale. If Ms Inman thought she had a lot on her plate when she took the job, it just got a lot fuller.