Bang & Olufsen Soars After Initial Takeover Approaches

  • Shares rise as much as 34% as electronics maker starts talks
  • Danish stereo maker's market value is about $455 million

Bang & Olufsen A/S, the Danish maker of high-end televisions and audio components, said it was approached about a possible takeover, giving a boost to its struggling shares.

The 90-year-old company has received “certain initial approaches” about a potential offer, Struer, Denmark-based Bang & Olufsen said in a statement Thursday. It is checking to see how firm the interest is. The stock surged as much as 34 percent.

The maker of $8,000-plus televisions has struggled to win buyers for its consumer products as prices for flat-screen TVs tumble and more people listen to music on their smartphones. Reports of takeover interest have appeared intermittently since early 2008, when former Chief Executive Officer Torben Ballegaard Soerensen was removed and disappointing holiday sales led the shares to lose more than a quarter of their value in a day.

“It’s exciting with an approach,” said Ole Soeberg, a fund manager at Skagen Funds in Oslo, which owns about 1 percent of the B&O stock. “We consider B&O to have great potential as a global brand.”

The company hired Carnegie to find possible buyers, newspaper Berlingske reported in January, citing a person it didn’t identify.

The shares soared 32 percent to 73.50 kroner as of 3:45 p.m. in Copenhagen. That gave the company a market value of about 3.2 billion kroner ($455 million). The stock has lost four-fifths of its value since peaking in 2006, and before today had fallen 12 percent in the last five years.

“The company has previously been a target of takeover speculation, so it’s not a complete surprise that these talks are now going on,” Ole Kjaer Jensen, head of equity trading at Sydbank A/S, said by phone. “We have seen the stock performing well recently, and that may suggest some people perhaps saw this coming.”

Chief Executive Officer Tue Mantoni said Sept. 30 Bang & Olufsen was continuing a process to sell ICEpower, a unit that makes amplifiers, and expected to announce a buyer for the business around Christmas. The company sold its car-stereo business to Harman International Industries Inc. this year to narrow its focus.

Ole Andersen, the chairman of Bang & Olufsen, told Danish newspaper Berlingske last December that the company is too small to stay independent and must either scale back business areas or seek partners.

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