Billabong shares have sank, bordering at the $1 mark, which is way below TPG's indicative offer of $1.45 a share, after the troubled Australian surfwear retailer admitted that TPG is having some concerns and reservations about the takeover issue.

''Billabong advises that TPG has confirmed that it has not withdrawn from the sales process,'' it said in a statement. ''As part of its due diligence investigations, TPG and its advisers have expressed concerns in relation to some issues, however discussions in relation to those matters are continuing.''

Billabong did not detail not offered any clarification about what the issues were.

"You look at Billabong and it's a mess," analyst Sondal Bensan said in Bloomberg News. "The retail deals that private equity have done well have been clean businesses. Billabong is very complex, it's got structural issues and it's not easy to turn around."

Another analyst also believed TPG's reservations is tantamount to a walkout, despite being highly interested in Billabong.

''Given the historical issues with this business, there was always the potential for the due diligence process to present problems,'' Deutsche Bank analyst Michael Simotas told BusinessDay.

''The probability of a deal progressing at this stage is very difficult to assess but TPG has been pursuing the business since February and made agreements with major shareholders which suggests that it is a keen buyer.''

In September, Billabong announced it attracted an unidentified second takeover suitor, which media reports said was private equity group Bain Capital. But the second bidder, which offered a bid just at par with rival bidder TPG, in just two weeks of due diligence, dropped out of the bidding chase.

Billabong did not provide details of the withdrawal of second suitor.