September 27, 2019 / 9:56 AM / 20 days ago

Austria's AMS lights up Osram bidding war with new $4.9 billion offer

VIENNA (Reuters) - Austrian sensor maker AMS (AMS.S) raised its takeover offer for Osram (OSRn.DE) to 4.5 billion euros ($4.9 billion) on Friday, ratcheting up the pressure on a private equity consortium also vying to buy the German lighting group.

FILE PHOTO: A lit bulb by German lighting manufacturer Osram is seen in front of packages with different Osram bulbs in this picture illustration taken September 1, 2019. REUTERS/Andreas Gebert

Osram, which is larger than AMS and a leader in automotive lighting, said on Wednesday that buyout firms Bain and Advent were prepared to offer “meaningfully” more than the Austrian firm’s bid, which was then 38.50 euros a share.

“AMS ... has increased the price of its all-cash takeover offer for 100% of the share capital of Osram to 41.00 euros per Osram share. All other terms and conditions of the best and final offer remain unchanged,” AMS said in a statement on Friday.

It later added that it had gained a significant foothold.

“AMS now holds 14.69% of all Osram shares as a direct shareholding including shares unconditionally bought today but not counting the shares already tendered into the Best and Final Offer,” AMS said. “This makes AMS the largest shareholder in Osram based on the latest information available.”

Best known for supplying Apple (AAPL.O) with sensors for iPhones, AMS said the offer would still expire on Oct. 1, leaving rivals a short window to offer an alternative.

AMS wants to expand in the auto industry and supply manufacturers with sensors and lighting systems for self-driving cars to reduce its dependence on smartphone producers.

SdK, a group representing small shareholders and itself a holder of Osram shares, said that it would now tender its stock to AMS. It did not say how many Osram shares it owns.

“From SdK’s point of view the industrial logic of a tie-up of AMS and Osram is understandable,” SdK said.

‘CAREFULLY PLANNED’

AMS has said it would cut Osram jobs outside Germany, sell its digital business and phase out its consumer general lighting LED business.

Shares in Osram were up 3.1% at 39.90 euros, valuing the company at around 3.86 billion euros ($4.2 billion), while those in Zurich-listed AMS were down 7.5% at 1010 GMT. Its market capitalization is 3.54 billion Swiss francs ($3.57 billion).

“We have provided comprehensive commitments aimed at safeguarding employees and production facilities of Osram in Germany and have carefully planned the successful integration of both companies,” AMS said.

“We offer a superior proposal to all stakeholders, including the Osram employees, given our strategic vision, higher growth, better cash flows and lower cost of capital,” it added.

FILE PHOTO: The logo of German lighting manufacturer Osram is illuminated at the company's headquarters in Munich, Germany, September 16, 2019. REUTERS/Andreas Gebert

Osram, hit by profit warnings and a weak car market, this month formally backed AMS’s previous offer, which was 10% higher than a bid by Bain Capital and Carlyle Group.

But reservations within management remained, dominated by doubts about the proposed group’s long-term business prospects.

Osram Chief Executive Olaf Berlien expressed his misgivings at the time by saying he would not sell his shares to AMS.

Additional reporting by Alexander Huebner in Munich, Thomas Seythal in Berlin and Christoph Steitz in Frankfurt; editing by Emelia Sithole-Matarise, Louise Heavens and Alexander Smith

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