AMS clear to make takeover bid for Osram in potential bidding war

By Jörn Poltz

MUNICH (Reuters) - Austrian sensor maker AMS <AMS.VI> will go ahead with a takeover bid for Osram <OSRn.DE> that values the German lighting group at 4.3 billion euros ($4.8 billion), it said on Wednesday, setting the stage for a potential bidding war.

Osram said it had waived an agreement that so far has prevented AMS from making a bid to rival that of private equity investors Bain Capital and Carlyle <CG.O>, confirming an earlier Reuters story that had pushed Osram shares to a five-month high.

The stock closed 3.1% higher at 36.25 euros, well above the 35.00 euros per share private equity offer but below the 38.50 euros per share AMS has promised.

"We are pleased to launch the takeover offer which will enable the compelling combination of AMS and Osram. Our strategy is built around growth for which a highly qualified workforce and a long-term commitment to Germany are essential," AMS Chief Executive Alexander Everke said.

Osram's waiver comes at the last minute for AMS, which has to give German watchdog Bafin 10 days to examine and approve its offer before it can launch it officially. AMS said it expects its bid to be launched before Bain and Carlyle's offer period ends on Sept. 5.

If AMS does so, the offer from Bain and Carlyle will automatically be extended so both bids run in parralel.

Bain and Carlyle, which sources say are considering raising their bid if AMS officially launches its offer, declined to comment on Wednesday.

Osram said AMS has provided for a minimum acceptance threshold of 70% and an acceptance period expected to run until the beginning of October 2019.

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. Staff representatives have voiced concerns that a takeover by AMS might lead to job losses.

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 signaled it would sell Osram's digital division and phase-out its consumer general lighting LED business.

Osram said it would give AMS further opportunity to convince it of its "business orientation, global location strategy and integration concept".

Shares in AMS closed down 3.1% at 37 euros apiece in Vienna while its Swiss-listed stock ended the day 2.3% up at 40.88 Swiss francs ($41.60).

The stock has fallen 40% over the past year, with investors - already concerned about high debt levels and the company's dependence on top customer Apple <AAPL.O> - seeing a combination with Osram as a risky move.

(Writing by Kirsti Knolle and Christoph Steitz; Editing by Mark Potter and Elaine Hardcastle)