Philips sells LG Display stake for $803 million

By Tom Bergin and Niclas Mika

LONDON/AMSTERDAM (Reuters) - Philips Electronics

said it had sold its entire stake in Korea's LG Display for 630 million euros ($803.6 million), as the Dutch company moves away from cyclical businesses and into steadier areas such as healthcare.

Philips (PHG.AS) said it sold 47.2 million LG Display (034220.KS) shares in the market, which represents 13.2 percent of the liquid crystal display (LCD) TV panel maker according to Reuters data.

Philips shares rose on the news, closing up 6.2 percent at 12.77 euros and outperforming a flat DJ Stoxx 50 index , the euro zone's blue-chip index.

Sources close to the sale said the price was 25,500 to 26,000 Korean won ($17.38-$17.72) per share, a discount to the 27,700 won closing price on Wednesday.

Philips has been reducing its interest in LG Display in the past two years and investors had been expecting more sales.

Petercam analyst Eric de Graaf said he was surprised by the timing. LG Display's shares have fallen by more than a third in the past year.

"It's positive, as cash is much better in the current market than owning a stake that would be sold in the short term anyway," de Graaf said.

He said that the interest income on the money probably would be only fractionally higher than dividend income from the stake in the short term.

The sale will remove an overhang on LG Display shares, as investors knew Philips was a long-term seller, although the discount to Wednesday's close may depress the price in the near term.

Market sources in Asia had predicted Philips would launch another sale of LG shares but did not expect it to sell the entire stake.

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Philips, which makes electric razors, lightbulbs, water kettles, MP3 players and CT scanners, has a strategy to move into less cyclical areas, such as lighting and healthcare, where it sees long-term growth at a more predictable pace.

Philips is one of LG Display's largest customers so the end of its shareholding in the Korean company could raise fears about LG Display's LCD sales.

Philips sold a 6.43 percent stake in LG Displays in March 2008 and a big stake the previous October.