D&M Holdings the owners of the Marantz, Denon and Boston brands is up for sale and during the past few weeks their shares have rocketed by over 40% as big name Companies bid for the Japanese operation. In the latest twist Kenwood who last year cut a deal with JVC has entered the auction frenzy.
The sale has seen a diverse group of operators bid for the Company that many believe is under valued. Kenwood who is partnering with Bain Capital joins the likes of Harmon Kardon and US retailer Best Buy.
The Japanese Nikkei indicates that the final round of bidding will take place in mid-May.Currently there are four participants in this second and final round of the auction process. They are Bain Capital, Advantage Partners, Merrill Lynch & Co., and Best Buy.
The business which has been valued at just just under $500 million which is said to be “well above its market capitalization” uses several distributors in Australia to sell their products including Audio Products Australia, Qualifi and Hi Fi & Video Marketing.
All four rivals for D&M have begun serious due diligence and all are expected to purchase RHJI’s entire 49% stake of D&M. Other sources have also suggested that Philips, which owns another 12% of the D&M stock, also intends to divest its holdings, perhaps to the winning bidder.
Interestingly, Kenwood itself is in the process of completing its business tie-up with JVC announced in July of last year. Kenwood, in partnership with Sparx Group Co., an asset management firm that is Kenwood’s largest shareholder, took financial positions in JVC thereby unburdening Matsushita Electric Industrial Co. of the money losing division. Kenwood was said to have purchased a 17% stake in JVC, while Sparx purchased 12.8% of JVC’s stock. This reduced Matsushita’s ownership from 52.4% to 36.8% and changed its relationship from that of a subsidiary to one of a financial investment.
Kenwoods purchase of JVC is expected to be completed by this fall. At this time, it is unclear what the impact of the successful acquisition of D&M would have on the Kenwood/JVC situation. According to the Nikkei story, a successful purchase of D&M by Kenwood would “bolster the business base of the Kenwood-JVC entity.”