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Oct. 7, 2019, 11:05 a.m. EDT

Apple supplier AMS knocked back on $4.9 billion Osram bid

AMS investors fear the Austrian chip maker may have another go at buying Osram

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By Callum Keown


Reuters

Shares in Apple supplier AMS /zigman2/quotes/205647546/delayed CH:AMS +5.31%   slid on Monday after investors were spooked by the company’s commitment to buying German lighting firm Osram /zigman2/quotes/205623891/delayed DE:OSR -0.25%  , despite a failed takeover bid.

AMS’ $4.9 billion bid for the struggling German light and sensor maker failed on Friday, to the initial delight of investors, who had concerns over the costs and benefits of the deal.

However, the Austrian chip and sensor maker pledged to continue its pursuit of Osram, sending shares 1.6% lower.

AMS has been attempting to diversify its revenue through partnerships and technology-led M&A, after a decline in iPhone sales last year.,

The Austrian chip maker started a bidding war for Osram with a $4.9 billion takeover bid in August.

Osram, which builds microchips, lighting systems and sensors for the auto industry, had already accepted a $3.8 billion offer from private equity groups Bain Capital and Carlyle.

AMS secured a €4.2 billion bridge loan from UBS /zigman2/quotes/206994749/delayed CH:UBSG +0.96%  and HSBC /zigman2/quotes/203901799/delayed UK:HSBA +1.34%   for the acquisition, which it planned to refinance once the deal was done by issuing €1.5 billion in equity and €2.7 billion in debt.

Shares tumbled 8% after the offer was made public earlier this year as investors were concerned over the company’s mounting debt pile.

AMS’s bid failed, the company said late on Friday, as investors owning only 51.6% of Osram’s shares accepted the offer — lower than the 62.5% needed.

However, the Austrian sensor specialist said it was committed to acquiring Osram to create a global leader in sensor solutions.

AMS’ stock made early gains on Monday but quickly fell sharply on fears the Austrian company may return with another bid.

Chief executive Alexander Everke said the “strategic logic and significant advantages” of the merger remained unchanged and that it would continue its pursuit of Osram.

Osram shares dipped 3.7% as investors were left disappointed by the failed deal but cautiously optimistic of another bid for the struggling company.

/zigman2/quotes/205647546/delayed
CH : Switzerland: SWX
CHF 16.25
+0.82 +5.31%
Volume: 3.39M
Aug. 4, 2020 5:31p
P/E Ratio
6.57
Dividend Yield
N/A
Market Cap
CHF4.18 billion
Rev. per Employee
N/A
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/zigman2/quotes/205623891/delayed
DE : Germany: Frankfurt
44.09
-0.11 -0.25%
Volume: 637.00
Aug. 4, 2020 6:08p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€142,956
loading...
/zigman2/quotes/206994749/delayed
CH : Switzerland: SWX
CHF 11.00
+0.11 +0.96%
Volume: 11.29M
Aug. 4, 2020 5:31p
P/E Ratio
9.15
Dividend Yield
0.00%
Market Cap
CHF39.08 billion
Rev. per Employee
CHF688,257
loading...
/zigman2/quotes/203901799/delayed
UK : U.K.: London
336.70 p
+4.45 +1.34%
Volume: 26.88M
Aug. 4, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£67.67 billion
Rev. per Employee
N/A
loading...

Callum Keown is a Barron's Group reporter for the Europe, Middle East and Africa region. He writes for MarketWatch, Barron’s, Penta and Financial News.

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