Billabong described TPG's A$3.00 per-share offer as indicative, nonbinding and subject to due diligence, financing and other conditions, including it not selling down any of its brands.

"That proposal was not certain," it said. "In the absence of certainty Billabong has proceeded with the partial sale of Nixon to stabilize its balance sheet."

Leaving the door open for the Fort Worth, Texas investor to return or for other potential suitors, it added that it "continues to be prepared to engage with any party that makes a proposal which is in the best interest of the company and its shareholders."

Billabong said it forged a joint venture with New York's Trilantic Capital Management LLC for Nixon, an Encinitas, Calif. company which is best known for its watches and surf and snowboarding accessories. The venture will generate $285 million in proceeds for Billabong to cut debt. Under the deal each company would hold 48.5%, with management owning 3%.

The deal values Nixon at 9.2 times Ebitda, or $464 million, over three times the $131 million Billabong paid for the business in 2006. Trilantic said it would finance the Nixon purchase with $140 million of equity and $175 million of debt.

Billabong, led by CEO Derek O'Neill, also said it plans to close up to 150 underperforming stores from its 677-store network to cut rent by A$20 million to A$30 million; to cut other costs by A$30 million a year from its 2013 fiscal year; and to reduce its dividend.

Billabong said the initiatives would materially affect its full-year results but couldn't say by how much. Before these one-time costs, Billabong said full-year Ebitda in the period ending June 30 would have been marginally above the analyst consensus of A$157 million.

For the six months ended Dec. 31, Billabong said revenue rose 1.5% to A$847.2 million and Ebitda declined almost 22% to A$74.1 million. A rise in the Australian dollar hurt repatriated sales and earnings and weak sales in Europe and Australia over November and early December also hampered results.

Billabong derived A$400.8 million of first-half revenue from the Americas, a rise of 5.1% on the year.

Net debt rose 37% to A$525.6 million, after Billabong had to make a deferred payment for the 2006 Nixon purchase.

Billabong announced its strategic review on Dec. 19, as it issued a profit warning which sent its shares down sharply. Before TPG's interest became public late Wednesday, the stock had lost about half its value since that announcement. Goldman, Sachs & Co. is Billabong's adviser.

Billabong's shares closed up 46% at A$2.62. TPG's offer represented a 68% premium to the A$1.79 Wednesday share price of Burleigh Heads, Queensland-based Billabong before shares were suspended.

TPG spokeswoman Sue Cato declined to comment.

Trilantic Capital was formed by former Lehman Brothers Merchant Banking executives when they bought the business in 2009 from the estate of Lehman Brothers Holdings Inc. Its focus is North America and Western Europe.

Partner Charlie Moore oversaw the Nixon purchase for Trilantic.