Denmark's Bang & Olufsen would listen to bid approaches

COPENHAGEN (Reuters) - Danish television and sound system maker Bang & Olufsen BO.CO would consider any bid approach from a larger rival as it seeks a response to problems that caused a profit warning last month, its chairman said.

A man stands in front of a Bang & Olufsen shop in centre of Budapest, January 9, 2013. REUTERS/Laszlo Balogh

B&O, a 90-year-old company which makes products for the luxury end of the consumer market, saw its shares fall to their lowest level since the middle of 2009 after it issued the profit warning on December 22.

“If someone knocks on our door, we will of course listen to what they have to say,” Chairman Ole Andersen told Reuters on Monday.

“We are not blind to the bigger Asian players, who have size advantages and much lower cost levels, which are some of our main problems,” Andersen added.

The company was looking at a range of potential solutions to its problems and a sale was just one option, according to the chairman.

He did not name any potential suitors but analysts said that Japan's Sony 6758.T or South Korea's Samsung 005930.KS could easily absorb a company with a well known brand but a market valuation of only around 1.6 billion Danish crowns ($255 million).

Shares in the company gained 3.6 percent after the chairman’s comments raised the possibility of a sale. They had lost around 28 percent over the previous three months.

Sydbank analyst Soren Lontoft said B&O’s technology would be attractive to some of the largest industry players, adding that another solution could be selling parts of the company.

“It is too soon to mention any names, but it is obvious to think of Samsung or Sony, as they would be big enough to see economy of scale by this purchase,” Lontoft said.

B&O has begun a review of its business to reduce the complexity which has hampered new product launches. Last month’s profit warning pointed to problems in production and the supply chain.

“We cannot continue with quarterly results going up and down, and due to our lack of size, B&O cannot handle too many such fluctuations without affecting the business,” Andersen said.

($1 = 6.2336 Danish crowns)

Reporting by Annabella Pultz Nielsen; editing by Keith Weir