Osram shares rise after takeover offer from private equity firms

FRANKFURT: Shares in German lighting group Osram rose 2% on Thursday after the firm disclosed a 3.4 billion euro ($3.8 billion) takeover offer from private equity firms Bain and Carlyle.

The two investors have offered 35 euros a share, Osram said in a statement late on Wednesday, confirming an earlier Reuters report that cited a source close to the matter saying they had secured funding for their offer.

The stock was up 2.14% at 0927 GMT at 32.94 euros, after surging as much as 13% on Wednesday.

The 110-year company used to make lamps and car headlights but over the years has broadened its business to include LED components, lighting for stage, film sets and growing plants indoors. Its Italian unit provides light effects for the annual Eurovision song contest.

Struggling with weakness in the automotive industry and a broader economic slowdown, Osram has seen its stock lose more than 60% of its value since hitting a high of 79.58 euros in January 2018.

In February this year, the company had confirmed that Bain and Carlyle were looking at whether to jointly bid for as much as all its shares. But weak financial performance had led many investors to doubt whether the investors would actually go ahead with their plan.

"The fundamental situation at Osram remains difficult," analysts from DZ Bank said in a note, changing their recommendation to 'hold' from 'buy', noting growing competition from the semiconductor industry.

According to people close to the matter, Bain and Carlyle have promised not to split up the company and given some guarantees for jobs and sites without ruling out headcount reductions.

Keeping the company's headquarters in Munich is also part of the investor agreement, they said, adding that the buyout groups supported Osram's management team led by Chief Executive Olaf Berlien.