Multiple sources are reporting a potential bidding war to take over German lighting group Osram. The news comes a little more than a month after Osram reported it had accepted a takeover bid from an investment firm.
Austrian company AMS, a specialist in sensors, reported it wants to take over the Germany-based lighting company in the first half of next year. It says it is ready to pay $3.8 billion for Osram’s shares. That would be about 10% more than finance investors Bain Capital and Carlyle offered for Osram on July 9. The offer has created a bidding war for Osram, and Osram stock surged on August 12 when the news was announced. In a conference call, AMS Chief Executive Alexander Everke said, “We plan to hold a shareholder meeting to approve to rights issue in the fourth quarter this year, and we expect to close the transaction in the first half of 2020.”
On July 9, 2019, lightED reported that a deal with Bain Capital and Carlyle was ready for completion as a result of a “diligent process with the best interests for the company, the shareholders and other stakeholders in the center of consideration”. At the time, Osram CEO Olaf Berlien added, “Bain and Carlyle are the right partners for Osram at the right time. They support our strategy and facilitate growth. Both are committed to our employees and offer shareholders an attractive premium.” But late last week, it was reported that Osram’s largest investor was rejecting the Bain and Carlyle offer because it believed the shares were worth more than what was offered.
AMS makes sensors for iPhones, and says it has a bridge loan to complete the transaction to take over Osram. But it added the merger would mean it will save hundreds of million of dollars by cross-selling products after the deal. It also promises to invest in manufacturing at the Regensburg, Germany plant by consolidating LED production, and would not change any collective bargaining agreements or pension plans for the next five years. It added that it would plan to phase out a consumer lighting division after the deal.
In early August, lightED reported on Osram’s third quarter earnings results, where the lighting company showed concern for the next year due to “economic turbulence”. As a result, the company did not predict any long-term earnings expectations.