UPDATE 2-Osram shares fall on debut as some investors bail out

Mon Jul 8, 2013 6:40am EDT

* Osram shares open at 24 euros, decline in early trade

* Market value of Osram at about 2.5 billion euros

* Osram was spun off by Germany's Siemens

* CFO says sees price levelling off in coming weeks (Adds CFO comments, valuation)

By Maria Sheahan and Alexander Hübner

FRANKFURT, July 8 (Reuters) - Shares in Osram Licht AG fell as much as 2.4 percent on their stock market debut on Monday, as some investors sought an exit following the lighting company's spin-off from engineering group Siemens AG .

Having opened at 24.00 euros, giving the company a market value of about 2.5 billion euros ($3.2 billion), shares in the company fell to a low of 22.99 euros. At 0927 GMT, shares traded at 23.18 euros apiece.

"That is just a snapshot," Osram finance chief Klaus Patzak told Reuters. "The share price and the valuation will settle over the coming weeks."

Monday's share price decline had been on the cards as mutual funds whose investment guidelines limit them to blue-chip stocks in Germany's DAX index have to sell their stock.

Osram had said last month in its listing prospectus that its listing could be accompanied by "considerable selling pressure".

U.S. owners of Siemens shares in the form of American Depositary Receipts (ADRs) are also not be able to keep the Osram shares, because the depositary banks are forced to sell the new shares and give the proceeds to the owners.

Siemens is spinning off 80.5 percent of Osram, the world's second-biggest player in the lighting industry after Philips , as it seeks to focus on its most profitable businesses.

SPIN-OFF PAYS OFF

Osram's market value is well below the 3.2 billion euros that its parent company has said the company is worth, but the spin-off still paid off for Siemens shareholders, who received one share in Osram for every 10 Siemens.

Siemens shares jumped almost 5 percent, though the move was exaggerated by Deutsche Boerse recalculating their Friday close to remove the value of the lost Osram stock. Ignoring that adjustment, the stock was up by around 1.8 percent.

Shares in the conglomerate rose as high as 79.40 euros, their highest in a month, as some saw the shedding of loss-making Osram as positive since the unit had been a drag on Siemens' earnings as it spent money to catch up with rivals.

Osram is in the midst of a restructuring, having been slow to adjust to a shift in demand from traditional light bulbs to newer technologies such light-emitting diodes (LEDs).

The company is cutting 8,000 jobs and reducing the number of factories it operates to 33 from 43, aiming to save about 1 billion euros over three years.

Still, CFO Patzak said there was no pent-up need for a spending splurge at Osram. "Investments will rise in the second half of fiscal 2013, but they will still be more or less on the level of 2012," he said.

The company aims to lift its margin of earnings before interest, tax and amortisation (EBITA) over sales to more than 8 percent from 2015 onwards. In its fiscal second quarter through March, it came to 7 percent, excluding one-off items, which was still behind the 8.4 percent margin at Philips Lighting.

Osram stock was trading at almost 26 times estimated 2013 earnings, compared with multiples of 15.5 times for Austrian rival Zumtobel and 13 times for Philips, though the latter also has businesses making medical equipment and home appliances.

($1 = 0.7792 euros (Editing by Christoph Steitz and David Holmes)

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