Blackstone and KKR weigh Billabong bids Blackstone and KKR are considering joining the bidding race for Billabong, the Australian surf wear company that has rejected a revised A$840m ($900m) offer by TPG, according to people familiar with the matter. TPG ended talks with the US private equity group late on Monday after Gordon Merchant, its founder and biggest shareholder, said he was not prepared to sell out even at a much higher price. Local investment firms - such as Archer and Pacific Equity Partners - are also weighing whether to make a bid. "There are a lot of questions about where growth will come from going forward and specific issues about the balance sheet which is fairly levered," said a Hong Kong-based executive at one large buy-out firm considering whether to make an offer. None of the companies has made a decision to make a formal approach for Billabong but recent share price falls have made Australia attractive for private equity groups, with several retail and industrial companies being targeted. KKR and TPG have dedicated Asia funds and less flexibility than firms such as Blackstone, which typically is more conservative, invests from one big global fund and is under less pressure to do deals in the region. KKR and Blackstone declined to comment. As it knocked back TPG's increased offer of A$3.30 a share, Billabong took the unusual step of publishing a letter it received on Monday night from Mr Merchant, who started the surf wear company with his ex-wife on the kitchen table of his Gold Coast house 40 years ago. In the letter Mr Merchant, who owns 15 per cent of the company, and Colette Paull, one of its earliest employees, said they would not support any moves by the board to engage with TPG even if the private equity group offered A$4 a share, which they claimed would "still represent a discount to the true value of Billabong shares." TPG had reached out to the family, hoping to get them to roll over their shares into the TPG deal, according to people familiar with the matter. The family is expected to hold out for a higher price than that at which institutional holders will sell. While the TPG bid was far higher than the level at which shares had been trading, it is also far lower than the peak price. TPG has been following the company for years and in the past considered a bid for Quicksilver, a similar company. Billabong, which owns the Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf brands, announced plans to close up to a fifth of its 670 stores and cut around 400 jobs earlier this month. However, analyst have voiced concerns about the ability of management, which has a reputation for not delivering on promises, to deliver the promised costs savings. It shares were trading over $9 a year ago and slumped over 40 per cent in December when the heavily indebted company warned of weak sales in main markets of Australia and the US. The shares fell 2.3 per cent in Sydney to close at A$2.98.