April 1, 2020 / 8:52 AM / 2 months ago

Austria's AMS wraps up $1.8 billion share sale to fund Osram buy

FILE PHOTO: The headquarters of lamp manufacturer Osram is pictured next to a traffic light in Munich, Germany, December 9, 2019. REUTERS/Michael Dalder

FRANKFURT (Reuters) - Austrian sensor maker AMS (AMS.VI) completed a 1.75 billion Swiss franc ($1.8 billion) rights issue on Tuesday which it needs to help finance its 4.6 billion euro ($5.1 billion) takeover of German lighting group Osram (OSRn.DE).

AMS said that 62% of the new shares had been sold to investors, meaning that the underwriting banks organizing the sale had to take up the remainder. They managed to sell an 8% stake, but had to take a 30% holding onto their books.

The underwriters sold the 8% stake at the issue price of 9.20 Swiss Francs a share for the rights issue, which was launched just as global equities markets were rocked by fears over the economic impact of the coronavirus pandemic.

Despite a large discount for the new shares, AMS stock slipped below the offer price several times during the subscription period. The new shares are expected to be delivered and start trading on April 3, AMS said.

The rump was sold in an “accelerated bookbuild”, where shares are offered within a short time window with little or no marketing, a deal type that has been popular with investors in the first quarter of 2020.

HSBC (HSBA.L) and UBS (UBSG.S) organized the rights issue as global coordinators with the help of Bank of America (BAC.N), Citi (C.N), Commerzbank, (CBKG.DE), Deutsche Bank (DBKGn.DE) Morgan Stanley (MS.N) and Erste Bank (ERST.VI).

Reporting by Arno Schuetze in Frankfurt and Francois Murphy in Vienna; Editing by David Goodman, Jane Merriman and Alexander Smith

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