Those of you rocking a regular speaker set probably haven’t heard of Bang & Olufsen, or B&O for short, so I’ll fill you in.

If you have around R40 000 to drop on a sound system and you want it to look like a piece of modern art, B&O is where you go.

The Danish consumer electronics company is known for combining style with top of the range technology. To give you an idea of just how iconic its products are, note that several B&O products are displayed at numerous museums, including the Museum of Modern Art in New York.

Unfortunately, it doesn’t look like it’s been doing that well on the business front lately.

In fact, according to Bloomberg, they’re under threat of a takeover.

The possibility of a takeover, based on vague comments by the chairman of the maker of luxury TVs and sound systems, drove the stock 15% higher on Friday morning. Then the balloon popped and investors were thrown back to the reality of losses that have erased half the Danish company’s value this year. Even B&O’s chief executive has made clearhe thinks the performance has been so bad he doesn’t want a bonus.

When people start turning down bonuses, you know things are bad.

“B&O wanted to do too many things at once,” said Claus Wiinblad, head of equities at ATP, Denmark’s biggest pension fund with about $120 billion in assets. For all that, the company had “too few product launches,” he said in an interview last week.

“B&O is once again in a crisis,” said Anders Schelde, chief investment officer of MP Pension, a B&O investor with about $18 billion in assets under management. “It’s difficult to see whether the past year’s problems are only due to execution issues, or whether there’s something that goes deeper.”

The company is working on a “contingency plan”.

If Andersen, 63, is considering selling, are there any potential buyers?

The chairman, who has held that position since 2010, rebuffed overtures from Sparkle Roll Group Ltd. in 2016. Andersen said at the time there was too much uncertainty surrounding a potential bid from the Chinese company, which three years ago made clear it wanted to build a stake that today hovers around 15%.

..ATP holds about 12% of B&O, making it the biggest shareholder after Sparkle Roll, which is controlled by Chinese billionaire Qi Jianhong and owns about 15%. The third-biggest owner is Nordea Bank Abp, which holds roughly 8.5%, according to the latest regulatory filings.

It looks like the company is going to do whatever it can to stay afloat, but it isn’t going to be smooth sailing.

“Our trust in the B&O brand is intact,” Wiinblad at ATP said. “In the long run, it’s important that B&O takes the right decisions to create the most value for us as shareholders.”

If you’ve invested in B&O, you’ll want to keep a close eye on the numbers moving forward.

[source:bloomberg]