VIENNA: Shares in Osram soared after Austrian sensor maker AMS triggered a bidding war for the German lighting group, saying it was ready to trump Bain and Carlyle with a cash offer valuing the company at €4.3 billion (US$4.8 billion).
AMS said it could create a global leader in sensors and photonics with the acquisition of Osram, a leader in automotive lighting technology whose share price has been depressed by profit warnings, doubts over its strategy and a weak car market.
The offer, which is subject to Osram’s waiving a standstill agreement, would trump Bain Capital and Carlyle’s €4 billion bid that has been recommended by Osram’s boards but slammed as too low by its biggest shareholder.
AMS is keen to diversify into technologies for self-driving cars as it works to reduce its dependence on Apple, which it supplies with sensors for facial recognition technology, and the smartphone sector more broadly.
“The transaction is strategically compelling as it creates the global leader in sensor solutions and photonics for consumer as well as automotive, industrial and medical applications,” said Chief Executive Alexander Everke.
“Together we will command the broadest portfolio of optical sensing and photonics in the industry,” he said on a conference call on Monday.
Osram shares were up 10% to €34.77 at 0804 GMT, below both AMS’s offer of €38.50 a share and Bain and Carlyle’s offer of €35.
Osram said it was examining AMS’s proposal and would comment later.
Shares in Swiss-listed AMS fell 10%, with Vontobel analysts saying the transaction would raise the risk profile of AMS and value creation would be highly dependent on synergies, which AMS expects to exceed €300 million a year.
The planned bid includes a €4.2 billion bridge loan facility underwritten by UBS and HSBC, which AMS plans to refinance by issuing debt and equity, including raising €1.5 billion of new equity.
A spokesman for Bain and Carlyle declined to comment.
AMS had previously shown interest in Osram in June, and in order to gain access for due diligence it signed a confidentiality agreement at the time, which includes a 12-month standstill agreement.
However, it backpedalled within days as it did not have enough financing at the time.
It provided a finance plan on Sunday and said it would wait until Aug 15 for Osram to waive the standstill agreement and then make an offer.
Analysts have questioned the logic of AMS’s interest in Osram, saying the Austrian firm would have to carve out or sell Osram’s non-semiconductor operations for a deal to make sense.
AMS said it sees Osram’s digital division – part of Osram’s attempt to become a high-tech group that builds chips, provides digital lighting systems and supplies sensors and other components – as non-core, adding that it would seek “the best owner” for the division.
AMS said a focus of the combined group should be on the auto sector. It already develops sensors that can help to map roads and control gear shifters and chassis in autonomous vehicles.
After a takeover, AMS aims to increase the automotive business’s revenue share to 35-40% from currently 10%.
The Austrian group also wants to phase out the consumer general lighting LED business, which includes Osram’s billion-dollar factory in Malaysia. Production should be moved to Germany’s Regensburg.