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Kenwood Denies Deal With Bain, D&M

6/23/2008 12:11:00 PM Eastern

Tokyo — Kenwood denied a press reports that it will invest up to $9.3 million in D&M Holdings after Bain Capital takes D&M private.

Bain Capital is expected to issue a statement tonight.

A Nikkei report claimed that once the buyout is complete, Kenwood would buy a portion of D&M shares from Bain to allow for collaboration in developing car audio products. Nikkei also said that if the partnership turned out to be successful, Kenwood would consider buying more shares.

Kenwood’s denial, however, seemed to leave an opening for future collaboration. “There had been some media reports today about our investment in D&M Holdings up to JPY1 billion to make [a] business and capital alliance, but there has been no concrete decision at the moment,” according to a D&M translation of the statement. “We are examining various options to improve our corporate value, but we place top priority on the integration with JVC and putting our maximum effort on it.”

In May, Kenwood and JVC announced that they would merge on Oct. 1, after the merger last October of their mobile, home and portable audio businesses.

Last week, D&M Holdings’ board of directors agreed to a tender offer by Bain Capital to take D&M private for 510 yen ($4.74) per share, or roughly $442.9 million. RHJ International, D&M’s largest shareholder, also agreed to the takeover. RHJ owns 45.3 million shares, or 48.5 percent of outstanding fully diluted shares.

Once it launches the offer, Bain said it intends to purchase 100 percent of the shares of D&M Holdings. Other shareholders include Philips, which is D&M’s second largest shareholder with about 12 percent of stock. Ten other major shareholders, including Japanese banks, own most of the remaining stock.

Bain will launch the tender offer within 25 days of the D&M board’s June 19 signing of the tender-offer agreement. Within a few months, D&M will be a wholly owned subsidiary of a holding company that Bain will create, said a spokesperson for D&M North America.

 

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