Billabong, which admitted a week ago that the Fort Worth buyout firm had "concerns" about pursuing its A$694.5 million ($709.7 million) offer, said "the unsolicited proposal from TPG has been withdrawn by TPG and discussions have ceased." It also said it had ended its formal sale process.

Billabong's shares in Sydney closed down 17% at A$0.84.

A person close to TPG said Billabong's "board and management were very constructive throughout the process and laid out a credible performance improvement plan, but ultimately TPG has decided to withdraw from the process." The person declined to reveal why TPG had made that decision.

TPG had been conducting due diligence since late July. It tried and failed to buy Billabong in February for A$3.30 per share, as its bid was rejected by Billabong's founder and largest shareholder, Gordon Merchant.

TPG's latest proposal reflected a subsequent stock offering, which widened the capital base and was worth A$1.45 per share.

Bain Capital LLC later made an offer for Billabong at around the same level but walked away in September.

Billabong chairman Ted Kunkel said the restructuring initiated by recently arrived CEO Launa Inman is going well, though the company predicted continuing challenging conditions in the 2013 fiscal year.

Assuming conditions don't deteriorate further, the company expects Ebitda of A$100 million to A$110 million in fiscal 2013.

Inman, a former managing director of retailer Target Australia Pty. Ltd., is trying to increase 2012 pro forma Ebitda of A$84 million by 2.5 times over four years.

The company said in its statement it has an "attractive independent future as a leading global board sports wholesaler and retailer."

Billabong's advisers are Goldman, Sachs & Co. and law firm Allens.