Bang & Olufsen's Chinese Suitor Qi Becomes Largest Holderby
Qi buys stock from Delta Lloyd to raise stake to 18.7%
`We may in the future seek to achieve majority ownership'
Bang & Olufsen A/S, the Danish maker of luxury stereo systems and TVs, said the Chinese suitor who’s been negotiating to purchase the company has become its biggest investor, buying stock from Delta Lloyd NV that increases his stake to almost 19 percent.
Qi Jianhong, a China-based billionaire, has agreed to buy all 5.67 million shares in Bang & Olufsen held by two affiliates of Delta Lloyd for 85 kroner each, according to a statement. That will give one of his companies about a 13.1 percent stake, according to the statement. Another owns 5.6 percent, bringing his total to 18.7 percent, the company said.
Bang & Olufsen shares rose as much as 10 percent and were trading 8.7 percent higher at 81 kroner at 9:04 a.m. in Copenhagen on Friday, for a market value of about 3.5 billion kroner ($534 million). With the purchase, billionaire Qi gains the clout of being the company’s biggest investor, without having to buy it all.
“We are very happy to become a major shareholder, and as communicated previously we may in the future seek to achieve a majority ownership of Bang & Olufsen through a public offer for all shares in the company,” Qi said in a statement.
Qi, who’s ranked 422nd on Hurun Report’s 2015 Rich List in China with an estimated wealth of 8 billion yuan ($1.23 billion), is negotiating to acquire the Danish company through wholly owned Sparkle Roll Group Ltd. He’s also the largest shareholder of a separate Chinese luxury-goods distributor listed in Hong Kong, also called Sparkle Roll Group Ltd. The listed Sparkle Roll’s shares fell as much as 5.6 percent to HK$0.50 in Hong Kong trading.
The 47-year-old Qi is the president of Beijing Cultural Investment Holdings Co., an auto-parts maker which is switching focus to the entertainment industry, including investing in a chain of cinemas named after Hong Kong superstar Jackie Chan, according to the company’s 2015 annual report.
The transaction gives B&O and its other shareholders a measure of clarity after a murky, months-long sales process for the company. Those efforts had left it with no strategic buyers, and one suitor in Qi, who as of Wednesday hadn’t even made a bid. A day before the deal, B&O described the talks with Qi as “uncertain,” as it raised its revenue forecast.
The stock was previously held by two Delta Lloyd funds, Delta Lloyd Europees Deelnemingen Fonds NV and Delta Lloyd L SIVAC, according to the statement. Delta Lloyd and its affiliates last reported holding 6.36 million Bang & Olufsen shares in May 2015, making the Dutch institution the company’s biggest shareholder with about 15 percent, according to data compiled by Bloomberg.
Qi holds the B&O stock through two companies, Sparkle Roll Group Ltd. BVI and Sparkle Roll Holdings Ltd. BVI, according to his statement. He owns 100 percent of both companies.