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Osram is likely on Wednesday to waive an agreement that currently prevents AMS from making a takeover bid for the German lighting group, paving the way for AMS to take on an offer from private equity investors, sources told Reuters. Osram shares, which have been hit by profit warnings, doubts over its strategy and a weak car market, rose as much as 3.8% to a five month-high of 36.50 euros.

That is well above the 35.00 euros per share that finance investors Bain Capital and Carlyle Group have offered to pay for the group, but below the 38.50 euros per share Austrian sensor specialist AMS has promised. For AMS to get a chance to table an offer and make its vision of a global heavyweight in sensors and photonics come true, Osram must waive a standstill agreement the Austrians had previously signed to get a look at Osram's books.

Osram's supervisory board is set to meet later on Wednesday, with staff representatives expected to again voice concerns that a takeover by AMS might lead to job losses, two sources familiar with the matter told Reuters. However, "a waiver of the standstill agreement is to be expected," one of the sources said.

An Osram spokesman said the company was aiming for any takeover to be an agreed business combination, while not commenting on the prospects of a waiver for AMS. Osram and AMS reported progress in talks last week after the German group, which has backed the offer from Bain and Carlyle, initially showed reluctance. Bain and Carlyle have promised Osram can continue as a standalone company under current management, and also made far-reaching promises to the workforce.

AMS has said it would create new jobs in Germany and not touch existing agreements with workers, but also signalled it would sell Osram's digital division and phase-out its consumer general lighting LED business.

Copyright Reuters, 2019


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