COPENHAGEN: Danish hearing aid maker William Demant has opened talks to buy French retailer Audika in a deal that would value the company at 168 million euros ($191 million).
A takeover would complement a long-standing supply partnership between the two companies and give William Demant a more direct retail link to customers.
It comes after William Demant, the world's second-largest hearing aid maker, was ousted by larger rival Sonova as a product supplier to Costco stores in the United States.
William Demant said in a statement it has entered into exclusive negotiations to buy a 53.9 percent stake in Audika held by controlling shareholder Holton SAS at a price of 17.78 euros per share.
Audika shares surged almost 28 percent to 17.25 euros while William Demant rose 0.9 percent to 495.40 Danish crowns.
If successful, William Demant would start a mandatory public tender offer under French regulations for the remaining 46.1 percent of the outstanding share capital of Audika.
Headquartered in Paris, Audika has more than 460 retail outlets across France and another six in Belgium. In 2014, Audika recorded revenue of 98.7 million euros.
Analyst Michael Friis Jorgensen from Alm Brand Markets said the deal looked like a defensive move.
"They don't want to lose the sales through Audika's stores but the deal could put a stop to their expected share buyback programme," Jorgensen said.
William Demant's advisers on this transaction are Moelis & Company and Latham & Watkins.
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