MARCH 08 W4 ALERTSTORY FOLLOW-UP: D&M Shareholder Wants Out - Harman Wants In
Harman International Makes Bid for RHJI Shares
<JIJI PRESS><TOKYO, MARCH 21, 2008>In a follow-up to a January report in the ALERT (story here), Jiji Press in Japan reports that Harman International has made a bid to purchase RHJI's entire 49% stake in D&M Holdings, Inc. According to the report, Harman seeks to take a dominant share of the global audio market through this purchase.
The deal is rumored to be valued at 70 billion yen, or approximately $704 million (at last Friday's exchange rate). Unnamed sources in the story indicate that RHJI will make their decision and "select a buyer" this spring...possibly suggesting that other suitors are in the running as well.
D&M Holdings, Inc., parent of the Denon and Marantz brands, has grown its business over the last few years through the acquisition of several premium brands such as McIntosh, Boston Acoustics, Snell, Escient, and more. The company is expected to announce fiscal year-end results this March of profits of 6.4 billion yen on sales of 108.5 billion yen. These are both record results.
As we reported in January, Philips Electronics NV of the Netherlands was also expected to put their shares up for sale. Philips' decision puts another 12% of the company into play.
Harman International is no stranger to the acquisition game and recently made news when its agreement to be acquired by KKR fell through late in 2007. Harman International's stable of brands include: Harman Kardon, JBL, Lexicon, Mark Levinson, Revel, and more.
A spokesperson for D&M in the U.S. referred the ALERT to a press release from the parent company in Japan released today which said:
Tokyo, Japan - March 24, 2008-D&M Holdings Inc. (TSE 1: 6735) notes that recent press reports concerning the potential purchase of share by new investors is not based on any information provided by the company. "
This is, interestingly enough, the press release in its entirety. According to the D&M U.S. company spokesperson, this release represents all they have to say on the matter.
A spokesperson for RHJI replied to requests for a comment on the story via email indicating that RHJI does not comment on rumors and noted, "This news hasn't been confirmed by either parties involved." Beyond this, there was no further comment.
Attempts to reach executives at Harman International for comment were not successful by press time.
ALERT will continue to monitor the situation and report on key developments as they emerge.