Apple supplier AMS provides 38.50 euro / share takeover offer for Germany's Osram By Reuters

VIENNA (Reuters) – Austrian sensor specialist AMS (S 🙂 triggered a bidding war for Osram (DE 🙂 on Sunday he said it was ready to pay $ 3.8 billion for the German lighting group's shares, 1[ads1]0 % more than financial investors Bain Capital and Carlyle (O 🙂 have already offered.

AMS is working to reduce the dependence on Apple Inc (O :), as it supplies sensors for face recognition technology, and invests heavily in technology for self-driving cars.

Osram, struggling with weakness in the automotive industry and a broader economic downturn, had aroused bidding interest because of its potential as a supplier of connected and autonomous cars.

Bain and Carlyle's bid of 35 euros per Osram share, which is expected to end on September 5, has support for the Munich Group's administrative and supervisory boards. But Osram's largest shareholder AllianzGI, which owns a 9.3% stake, and a small shareholder group have rejected the offer as too low.

AMS said on Sunday that it had submitted a proposal to Osram for an offer of takeover for cash at a price of 38.50 euros per share. Including debt, the offer values ​​the German group at 4.3 billion euros, it says.

However, in order to make a bid, the Austrian group needs the German firm's consent.

A spokesman for Osram said the group had noted the announcement but had no comments yet. A spokesman for Bain and Carlyle declined to comment.

STAND UP AGREEMENT

AMS had already shown interest in Osram in June, and to access due diligence, it signed a confidentiality agreement that includes a 12-month downtime agreement. AMS had withdrawn within a few days at the time when it had insufficient funding.

It provided a financial plan on Sunday, saying it would wait until August 15 for Osram to waive the standstill agreement and then make an offer.

"The proposal is convincing to all stakeholders in Osram," AMS chief Alexander Everke said in a statement. "Therefore, we trust that Osram will waive the standstill agreement and allow its shareholders to take advantage of our offer."

The proposed bid includes a EUR 4.2 billion loan facility subscribed by UBS (S 🙂 and HSBC (L :), which AMS plans to refinance by issuing debt and equity, including raising EUR 1.5 billion of new equity, "first and foremost" through a rights issue.

"The combination of AMS and Osram creates a global leader in sensor emitters and photonics with approximately EUR 5 billion of revenue," the group said. "The transaction enables AMS to improve sensor solutions and photon offerings in terms of performance, size, energy efficiency and cost."

Analysts have questioned the logic of AMS's interest in Osram, saying that the Austrian company would have to carve out or sell Osram's non-semiconductor operations for a deal to make sense.

AMS said on Sunday it sees Osram's digital division – part of Osram's quest to become a high-tech group that builds chips, supplies digital lighting systems and supplies sensors and other components – as non-core, and adds that it will seek "the best owner" for the division.

($ 1 = 0.8930 euros)