The Canadian action sports retail saga just added another chapter this morning when Canada’s largest action sports retailer, West 49, announced it had received a purchase offer from Zumiez for an amount to exceed Billabong’s recent offer of C$1.30 per share.

Zumiez announced in mid-June that it would be expanding into the Canadian market with its own stores, but it looks like they may have found a cheaper entry, capitalizing on West 49’s established customers at its 136 stores, if the deal is approved.

It sounds like this is anything but final at this point and we expect the story to keep rolling as it looks like West 49 is still leaning towards Billabong’s offer. According to the West 49 press release:

The Company’s board, after consultation with its outside legal and financial advisors, has concluded that the Zumiez proposal would reasonably be expected to lead to a superior proposal. However, the Company is concerned with Zumiez’s previously stated intent to enter the Canadian market, and therefore the board has instructed the Company’s management to seek to protect the Company’s competitive position. Subject to the terms of the existing agreement with Billabong International Limited, the Company’s special committee intends to seek to negotiate with Zumiez to determine if its offer can become a firm offer that is financially superior to the transaction with Billabong and that West 49 can otherwise treat as a superior proposal under the terms of the existing agreement with Billabong. There can be no assurance that Zumiez will in fact make a firm proposal or, if it does, as to the price, terms or conditions thereof. In the event that Zumiez does make a proposal that the board determines constitutes a superior proposal which the Company wishes to accept, Billabong would have the right, but not the obligation, to match such proposal within a 5 business day period.

The special committee and the board as a whole confirm that they continue to support the Billabong transaction and confirm their unanimous conclusion that the transaction with Billabong is in the best interests of the Company and is fair to the Company’s securityholders and their recommendation that securityholders vote in favour of the Billabong transaction, under which the Company’s common shares and preferred shares would be acquired at C$1.30 per share. The agreement with Billabong remains in effect at this time. Further details of the Billabong transaction are expected to be included in a proxy circular to be mailed to shareholders in due course