Bang & Olufsen Raises Forecast as Talks With Suitor Continue

  • Talks ``may or may not'' lead to an offer for the business
  • Full-year sales forecast raised on speaker, headphone demand

Bang & Olufsen A/S, the Danish electronics maker mired in takeover talks that remain “uncertain,” said sales have picked up and raised its revenue forecast.

"The dialogue may or may not lead to an offer," the company said Wednesday in a statement. "At present, uncertainty remains as to the outcome."

A recovering business may strengthen B&O’s hand in the takeover talks with a Chinese suitor. B&O said full-year sales will increase as much 15 percent, compared with the earlier estimate of 12 percent, because of rising revenue from the B&O Play business selling stand-alone home speakers and headphones.

Billionaire Qi Jianhong, the largest shareholder of Chinese luxury-goods distributor Sparkle Roll Group Ltd., came out on March 22 with an expression of interest in B&O, while stopping short of announcing an actual offer for the 91-year-old company. B&O, a maker of luxury televisions and speakers, has sought a buyer for years to help it revive its fortunes.

Chief Executive Officer Tue Mantoni wouldn’t give further comments about the discussions on the company’s conference call. "As soon as we have more to say about this, then obviously we will alert the market," Mantoni said.

Shares of B&O rose 0.7 percent to 71 kroner at 3:40 p.m. in Copenhagen. They have declined 14 percent this year, giving the electronics maker a market value of about 3 billion kroner ($459 million).

Revenue rose 8 percent to 703 million kroner last quarter. Fiscal third-quarter earnings before interest and taxes were 5 million kroner, after a loss of 70 million kroner a year earlier, evidence the company’s business is rebounding, Mantoni said in the statement. B&O also said it agreed to sell its Icepower A/S audio amplifier business for an enterprise value of 32 million kroner.

Among the many risks for investors is the failure of B&O, known for its elegant designs and correspondingly high price points, to entice strategic buyers like Samsung Electronics Co. or TCL Corp., or even LG Electronics Inc., the South Korean company that agreed March 18 to make B&O branded TVs as part of Danish company’s cost-reduction plan. Patrik Setterberg, an analyst at Nordea Bank AB, said it would be been optimal to have other bidders competing as the chances of a firm offer materializing isn’t 100 percent.

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