Shares of debt ridden Australian retailer Billabong International, already floating in oblivion, sank deeper on Friday after its lone bidder TPG International LLC decided with finality to call off its takeover bid of the surfwear maker.

Billabong, in a statement to the Australian Securities Exchange, said discussions between the two parties have terminated.

"As a result, the formal process to evaluate change of control proposals . . . has concluded," the company said.

Investor confidence immediately reacted, with shares dropping 15 per cent. At 1102 AEDT, Billabong shares fell to 86 cents, against a benchmark index rise of 0.19 per cent, according to figures by the Business Spectator.

"When two bidders have walked away after seeing the books, the first question in investor minds is: what is hiding in the books? The TPG withdrawal is a big negative for the stock," market strategist Stan Shamu said in Reuters News.

"I'm not prepared to touch this thing. The risks are through the roof," analyst Tony Wilson said in Bloomberg News. "The fact that TPG have walked away -- does that mean they can't see any equity value in the structure?"

Analysts from Nomura estimate Billabong's shares could dive a further 29 per cent today Friday to an even lower 60 cents a share, the Wall Street Journal reported, representing 20 per cent slice off the benchmark S&P/ASX200 twelve-month forward price-earnings multiple.

"It is not appropriate for me to comment. It really was their concerns not ours," Billabong chief Launa Inman told reporters Friday morning when asked why TPG cancelled its takeover bid.

"TPG just contacted me as soon after the markets closed last night (Thursday) to say the deal was off."

Read more:

Billabong Shares Down; Takeover Bidder TPG Raises Concerns

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