Shares in troubled surfwear retailer Billabong International jumped by more than 20 per cent on Tuesday after news that US private equity firm TPG had presented a second takeover offer bid of $695 million.

Billabong International's shares soared by 22 cents higher at $1.32 shortly after trading resumed at 1100 AEST.

In a statement to the stock exchange on Tuesday morning, Billabong International advised investors they not need to take immediate action as it would still update the market its decision on TPG's proposal. The latter's latest offer was $1.45 a share, a 32 per cent premium to Billabong International's last traded price of $1.10.

But the second takeover offer bid, rather than sweetened, appears to have soured since the private equity giant expressed its intent to acquire the troubled surfwear retailer in February.

Five months ago, Billabong International rejected TPG's sweetened bid of $3.30 per share from $3, claiming the offer did not give justice to the company's underlying value.

Since then, Billabong International was forced to conduct a $225 million capital raising as well as reduce its earnings following the weak retail climate.

Gordon Merchant, founder and biggest shareholder of the troubled surfwear retailer, had publicly admitted his wrong decision of rejecting the first bid. Mr Merchant owns 15.6 per cent of the stock.

"No one has lost more money than I have," he said in June. "I thought it was the right decision at the time."

The indicative, non-binding and conditional second takeover offer bid is still subject to several conditions, including unanimous board approval, Billabong International said.

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