Shares of beleaguered Australian retailer Billabong International rode on a high early Monday morning before being placed on a trading halt on rumors of a $526.8 million takeover bid by a consortium led by former director Paul Naude.

Billabong shares rose to as much as seven per cent on Monday, fuelled by reports Mr Naude's group had submitted a $1.10 a share takeover offer. When the trading halt began at 1211 AEDT, the stock was already 4.5 cents, or 4.8 per cent, higher at 98 cents.

At 12.11pm, the stock, allowed to trade for more than an hour, was placed under trading halt, after Billabong told the Australian Stock Exchange it planned to make an announcement regarding "a possible change of control proposal."

Mr Naude, Billabong's president in the Americas and a member of the company's board, voluntarily stepped down from his position in mid November as he attempted to try and take control of the surf retailer.

"I can't confirm or deny anything," Craig White, Billabong's chief financial officer, told Bloomberg News before the trading halt announcement.

The trading halt will remain for two days, or until Billabong requests it be lifted.

Mr Naude owns 0.2 per cent of Billabong.

Billabong had received three takeover offers this year alone, from private equity firms TPG and Bain Capital. TPG lodged two offers, the first was denied because according to the surfwear retailer, it undervalued the company. The second offer was voluntarily withdrawn by TPG this time during the due diligence phase.

Bain Capital likewise withdrew during the due diligence process.