AMS AG re-entered the battle for Osram Licht AG with a 3.7 billion euros (US$4.14 billion) offer, days after a major shareholder rejected a lower bid by rivals for the German light and sensor maker.
Osram shares yesterday soared as much as 11 percent, following the weekend approach from AMS that values the target at 38.50 euros a share. That compares with the bid at 35 euros a share from private-equity firms Bain Capital and Carlyle Group that was thrown into jeopardy last week when top investor, Allianz Global Investors, rejected it as too low.
The new offer is in line with an earlier bid that fellow Austrian sensor maker AMS mooted, but then withdrew almost a month ago.
Osram “raised valid concerns in the past, and I think with the offer we provided them yesterday, we answered all their concerns,” AMS chief executive officer Alexander Everke said in a call with reporters yesterday. “We have been looking at Osram for a long time.”
Yesterday morning, AMS shares fell 8.7 percent in Zurich trading, while Osram traded at 35.09 euros in Frankfurt, Germany.
Osram became a takeover target after a series of profit warnings and a public spat over strategy with Siemens AG, which spun off the division in 2013. Its earnings have suffered because of the company’s exposure to the automotive industry, which accounts for more than half of its revenue.
Automakers and suppliers are grappling with shrinking demand in China and Europe, and the expensive transition to electric vehicles. Investors also lost confidence in the ability of CEO Olaf Berlien and management to turn the company around. The stock has lost more than half its value since peaking in early last year.
“This counter bid will test how keen the private-equity consortium is for the Osram asset as AMS has now secured financing to offer 10 percent more per share,” Morgan Stanley analyst Lucie Carrier said in a note.
If AMS were successful in its takeover attempt, it would sell off Osram’s digital division that makes lighting controls for use in horticultural and medical systems, among others, Carrier said, adding that the company would not touch Osram’s collective bargaining agreements for five years.