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German lighting group Osram advised its shareholders on Monday to accept the takeover bid from AMS and sell their shares to the Austrian sensor specialist, saying the offer was economically attractive.

Osram: AMS offer is financially attractive

Regards Bain and Carlyle's concept still as more viable

Osram concerned about AMS's ability to repay debt

VIENNA, Sept 16 (Reuters) - German lighting group Osram OSRn.DE advised its shareholders on Monday to accept the takeover bid from AMS AMS.SAMS.VI and sell their shares to the Austrian sensor specialist, saying the offer was economically attractive.

AMS launched its bid for the much bigger leader in automotive lighting earlier this month, beating a rival offer from private equity investors Bain Capital and Carlyle Group CG.O by 10%.

"Osram's executive board and the majority of its supervisory board recommend... that Osram shareholders accept the offer," the German group said in a statement.

Osram had initially backed the finance investors' offer, who had agreed to maintain Osram as an independent company with its current management and to support its strategic direction.

Osram said it still considered the duo's business concept as more viable than that of the Austrians. However, "the financial attractiveness of the (AMS) offer was to be weighted higher than points of criticism."

AMS, which is best known for supplying Apple AAPL.O with sensors for its latest iPhones, wants to focus a combined business strongly on the auto industry and supply manufacturers with sensors and lighting solutions for self-driving cars.

The supervisory board's decision to recommend AMS's offer was not unanimous. Employee representatives fear that AMS could break up the company. Osram's management and supervisory board are worried about the long-term business prospects.

AMS has to take on billions of debt to finance the takeover, and Osram said paying off the funds could become difficult. AMS depended largely on a group of key customers, and that entailed the risk "that the financial situation of the combined group may become very strained" if key customers switched to other technological solutions or place less orders.

Osram also voiced doubts whether the Austrian sensor specialist, whose number of staff is about a third of that of the German group, will be able to stem such a complex takeover.

"There is a risk that AMS may not be able to successfully organise the integration and to realise at the same time the publicly announced synergies in the intended short period of time," it said.

AMS is offering 38.50 euro per share for Osram, Bain and Carlyle offer 35 euros. The acceptance period runs until Oct. 1. AMS needs to convince 62.5% of Osram investors to be successful.

(Reporting by Kirsti Knolle; Editing by Daniel Wallis)

((kirsti.knolle@thomsonreuters.com; +43 1 53 11 22 55;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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