July 3, 2019 / 2:37 PM / 14 days ago

Osram to consider $3.8 billion takeover bid from Bain, Carlyle

FRANKFURT (Reuters) - German lighting group Osram (OSRn.DE) said on Wednesday that its supervisory board would meet soon to review a binding offer from private equity firms Bain and Carlyle (CG.O) to buy the company for 3.4 billion euros ($3.8 billion).

FILE PHOTO: Logo of lamp manufacturer Osram is pictured during official opening of the company 'World of light' showroom in Munich, Germany, October 24, 2017. REUTERS/Michaela Rehle/File Photo

The two investors have offered 35 euros ($39.49) a share, Osram said in a statement, confirming an earlier Reuters report that cited a source close to the matter saying they had secured funding for their offer.

Shares in Osram rose by 11.5% to close at 32.25 euros.

The stock has shed over 60% of its value since hitting a high of 79.58 euros in January 2018. The takeover bid from Bain and Carlyle puts an equity value on Osram of 3.4 billion euros. The company has modest debts.

Osram also whet the appetite of other suitors, including Austrias’s AMS (AMS.S) (AMS.VI), which expressed interest in a deal but never made a concrete takeover offer, one of the people said.

AMS was not available for comment.

Osram, which is grappling with weakness in the automotive industry and a broader economic slowdown, said in February that Bain and Carlyle were looking at whether to jointly bid for up to 100 percent of its shares.

Chief Executive Olaf Berlien, who took over in 2015, has sought to transform Osram from a light bulb maker into a high-tech group that builds chips, provides digital lighting systems and supplies sensors and other components.

But his plan has failed to win over investors and the company has faced headwinds, particularly in its main automotive market where weakness often ripples through semiconductor and component supply chains early in downturns.

After cutting its profit guidance twice last year, Osram said in March it expects full-year revenue to decline between 11% and 14% compared to an earlier forecast for flat to moderate sales growth.

In May, the company posted a hefty drop in second-quarter earnings, pointing to a downturn in the automotive industry and a broader economic slowdown, prompting investor fears about its future earnings.

As part of its restructuring, Osram last month sold its luminaires unit Siteco to the investment arm of strategic consultancy Stern Stewart & Co.

Osram was floated in 2013 by industrial conglomerate Siemens (SIEGn.DE), which sold its last shares in late 2017.

Reporting by Arno Schuetze, Alexander Hübner, Kathrin Jones, editing by Douglas Busvine and Elaine Hardcastle

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