Bang & Olufsen shares fall on possibility of capital boost
COPENHAGEN (Reuters) - Upmarket Danish audio equipment and TV maker Bang & Olufsen (BO.CO) is considering various possibilities for boosting its capital to help accelerate growth, its chief executive said on Friday, sending it shares lower.
However Tue Mantoni said the firm had not yet made any decisions on the matter and declined to expand upon how he thought its capital should be bolstered.
"Given that we are looking into a growth period in the next two to three years we have been looking at whether there are any initiatives we could accelerate if we had more capital," Mantoni told Reuters.
He said such initiatives could involve investments in distribution, marketing, and research and development.
Shares in Bang & Olufsen, which were already 7.6 percent down on the day due to disappointing quarterly results, fell further after the announcement.
At 1016 GMT they were down 14.5 percent, underperforming the Danish benchmark index .OMXC20CAP which was down 2.2 percent.
"Investors fear that the dilution of the existing shares following an issuance of new shares will be greater than the value the new capital could create for the company," Alm Brand Bank analyst Jesper Christensen said.
The company, which was loss-making in the last financial year, aims for its earnings before interest and tax to be around break-even level this year.
Earlier on Friday the company said it narrowed its operating loss in the third quarter due to improvements in its European business. However sales of its cheaper Play brand fell, which disappointed analysts.
Bang & Olufsen's German peer Loewe LOEKk.DE has been seeking investors and agreed in March to be taken over by Munich-based investor Stargate Capital.
(Reporting by Teis Jensen; Additional reporting by Annabella Nielsen; Editing by Pravin Char)