Board-sports clothing and equipment maker Billabong International Ltd. Friday, July 27, offered to open its books to TPG Capital, and suggested it was looking for an improvement on the A$694.6 million ($724.6 million) proposal the buyout firm made four days earlier.

Billabong said the due diligence access was subject to the two parties negotiating a confidentiality agreement and would be nonexclusive. It hopes the process will enable the Fort Worth, Texas investor to "reduce the conditionality of its proposal and improve its understanding and valuation of Billabong."

"In any control transaction, the Billabong board will seek to ensure that the medium to long-term prospects of the company and its unique brands are reflected in the value realized by Billabong's shareholders," the target said.

TPG late Monday proposed an indicative offer of A$1.45 per share, returning five months after Billabong's board and its founder and leading shareholder Gordon Merchant had reject its previous A$3.30-per-share bid.

In the intervening five months the Gold Coast, Australia-based company hired Launa Inman as CEO to replace Derek O'Neill, issued a new profit warning and raised A$225.4 million in a heavily discounted share sale which increased the number of Billabong shares in issue by 86%. Billabong, whose brands include Element, VonZipper, Honolua Surf Co. and Tigerlily, has been closing stores to combat a sales downturn in Australia, Europe and Canada.

In June Billabong forecast Ebitda of A$83 million to A$88 million for the year ending June 30, excluding a profit contribution from watchmaker Nixon Inc. and the proceeds from the sale of 51.5% of Nixon to Trilantic Capital Partners earlier this year.

The new TPG proposal is conditional on financing, the support of the Billabong board and regulatory approvals, and on the target's net debt not rising significantly above the A$100 million debt guidance delivered on June 21.

TPG has the backing of Colonial First State Investment Ltd. and Perennial Value Management Ltd., which together hold 12.5% of Billabong.

Billabong shares late Friday were trading at A$1.35.

Under TPG's proposal Gordon Merchant, who owns about 17% of the company, and Colette Paull, one of Billabong's earliest employees, would have the right to roll their shareholdings into a new vehicle. Both had opposed TPG's earlier approach, with Merchant calling in February for a bid worth more than A$4 per share. He has since publicly regretted that stance.

TPG's sweetened February proposal had valued Billabong's share capital at A$841.8 million.

TPG made its Australian debut in May 2006 with the A$1.4 billion consortium purchase of department store operator Myer Pty Ltd., which it exited in 2009 via an initial public offering, triggering a tax dispute with Australian authorities. Its other local portfolio companies include healthcare provider Healthscope Ltd., which TPG manages from its Melbourne, Australia, office.

TPG is taking advice from Macquarie Group Ltd.

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

Nonexecutive directors Merchant and Paull are taking advice from Greehill Caliburn Pty. Ltd. During the abortive February offer period the pair's legal adviser was Bruce Cowley at law firm Minter Ellison.