VIENNA (Reuters) - AMS AMS.S launched a renewed $5 billion (£3.9 billion) takeover bid for Osram OSRn.DE on Thursday, hoping its latest offer would convince investors with a lower acceptance rate and concessions to the German lighting group's management and trade unions.
The Austrian sensor maker failed with a first offer at the same price of 41 euros (£35) per Osram share last month, a setback for Chief Executive Alexander Everke’s plan to form a European leader for integrated sensor and lighting solutions.
AMS collected 51.6% of shares, including its own nearly 20% stake, short of the required 62.5%. Some investors had hoped for a higher offer from private equity groups Bain Capital and Advent, which they had signalled but then refrained from after AMS’s miss.
After the finance duo’s exit, Everke continued to negotiate with Osram management and labour representatives to overcome their opposition. They had voiced doubts regarding the ability of AMS with 8,500 staff to integrate Osram’s more than 24,000 employees.
Everke did not provide a business combination agreement with Osram before launching the new bid as he had planned to. But talks aiming at enhancing “the cooperation between the two companies and expand on Osram’s existing photonics strategy” continue, AMS said.
In a move to accommodate trade unions, AMS is ready to apply an employment protection scheme until end-2022 on the sites in Germany, the offer document says.
The document does not say Osram’s digital business should be sold, but that AMS and Osram will jointly reassess every division for its longer-term contribution. AMS had previously said it would seek “the best owner” for the unit.
AMS’s plan to relocate production from Osram’s loss-making plant in Kulim, Malaysia to Regensburg, Germany, will be reviewed as well, it said. The Osram brand should also become part of the AMS company name.
Osram said it welcomed the ongoing discussions and hoped an agreement could be finalised soon.
Everke has lowered the acceptance rate in his new bid to 55% to increase his chances of success. He can hope to secure the around 9% stake of Allianz Global Investors.
Less clear are the intentions of new Osram shareholder hedge fund Sand Grove, which amassed a 5.75% stake six days after AMS announced its intention for a renewed offer.
It could complicate AMS’s bid or make a quick profit. The hedge fund could cash in about 4 million euros if it successfully tenders the shares, according to Reuters estimates.
Around 10% of Osram shares are held by exchange traded funds, which according to German law, are not allowed to sell their stake as long as the takeover is not completed, banking sources say. Retail investors hold 20%-25%, the sources say.
(This story was corrected to read Malaysia (not Singapore) in paragraph 8)
Reporting by Kirsti Knolle, Editing by Michael Shields and Emelia Sithole-Matarise
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