You've heard of Bang & Olufsen, the Danish maker of high-end hi-fis and televisions. How about Sparkle Roll?
No, Sparkle Roll isn't a magic unicorn from My Little Pony. It's a Hong Kong-based company that trades luxury goods in China, including Bentley and Lamborghini cars, DeWitt watches and expensive French wines.
Now the company has B&O in its sights too, and plans to buy the maker of $10,000 designer televisions outright, according to a Bloomberg News report.
The Danish company -- which has a market capitalization of about $455 million -- has made no bones about being on the block. The electronics maker has struggled as prices of flat screen TVs tumble and rivals like Apple upped their emphasis on design too. B&O has posted pretax losses for each of the past three years, according to Bloomberg data.
A bid from Sparkle Roll makes some sense: it has had a Chinese sales deal with B&O since 2012. Still, it may be surprising that a well-known western brand looks like prey for a bidder whose name is barely known outside of China. Get used to it. Wildcard bidders, especially from China, are becoming a regular feature of deal-making.
The trend is most noteworthy on big deals. Think Anbang Insurance's attempt to buy Starwood hotels for $13 billion. But there's also a long list of smaller deals too, from Hony Capital's 1.1 billion-euro ($1.2 billion) purchase of Pizza Express in 2014 to Dalian Wanda's 1.05 billion-euro acquisition of Infront Sports and Media Group last year. More recently, Chinese coal miner Shandong Hongda Mining agreed to buy U.K.-based video game developer Jagex for $300 million.
It's not just corporate buyers either. A whole list of private equity-style groups from China are turning up too. These include Xio Group - a China-based private equity firm that recently hired a team for a new office in The Shard in London -- and Agic Capital, a private-equity group started by former Deutsche Bank executive Henry Cai, which has set up an office in Frankfurt.
Many of these buyers are interested in assets with a Chinese angle -- consumer goods companies or restaurant and hotel chains, for instance. These industries should benefit as Beijing attempts to shift the focus of the economy from investment to consumption. They're also interested in energy, materials and healthcare -- industries China will need more of as it continues to modernize.
Meanwhile, Western investment bankers say they're scrambling to keep up with the new names on the scene. As a different set of buyers emerges, bankers are finding they've been schmoozing the wrong potential clients. Perhaps their best investment would be some canapes in Beijing and Shanghai.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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