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* AMS raises 1.75 bln Swiss francs via rights issue
* UBS, HSBC take combined 15% AMS stake
* 62% of shareholders, subscription rights holders took part
(Adds banking sources, analysts, detail, background)
VIENNA, April 1 (Reuters) - Weak demand for sensor maker
AMS's share issue this week has highlighted investors'
doubts about the company's ability to cope with its takeover of
German lighting group Osram.
Low take-up of the Austrian group's capital increase by
investors forced underwriting banks UBS and HSBC
to take a combined 15% AMS stake.
Swiss-listed AMS shares fell more than 12% to a nearly
eight-year-low of 8.35 Swiss francs on Wednesday. Osram's traded
as low as 28.85 euros, more than 12 euros below the 41 euros AMS
has agreed to pay to buy the company.
"Some investors are sceptical about the AMS-Osram deal,
which was struck before the Covid-19 crisis, as conditions are
totally different today," said one banking source.
Investors were already doubtful about the Osram takeover
because AMS, which is heavily dependent on Apple as a
customer, took on more than 4 billion euros in debt to buy the
German group, which has three times as many staff.
Now with the coronavirus pandemic spreading and halting
manufacturing across the world, concerns regarding future
revenue streams have increased.
AMS issued 190 million new shares via a rights issue,
raising 1.75 billion francs ($1.8 billion) as planned to help
fund its purchase of Osram, with which it wants to develop
solutions for self-driving cars and smartphone applications.
But because of low take-up, UBS and HSBC were left with an
AMS stake of 7.7% and 7.2% respectively.
Only 62% of AMS shareholders and subscription rights holders
bought the new shares. One banking source said this was one of
the lowest take-ups he had seen in his professional life.
An additional 8% of AMS shares were sold in the market.
Liberum analysts said: "Our concerns on the acquisition have
... increased as a result of the sharp on-going weakness in auto
demand on the back of Covid-19 and the impact that this is
expected to have on Osram's profitability and cash flow."
Osram withdrew its 2020 guidance last month, saying the
pandemic would affect demand in its semiconductor and automotive
divisions, which account for more than half its sales.
AMS, known for supplying iPhones with sensors for their face
recognition features, confirmed its first-quarter revenue
forecast of $480-520 million two weeks ago. Customers, such as
Apple, have had production disruptions due to the coronavirus
crisis.
UBS and HSBC, along with Bank of America Merrill Lynch
, have provided a 4.4 billion euro bridge loan for the
Osram purchase.
The rights issue, earmarked to refinance the loan, now
increases UBS's and HSBC's commitment by nearly 200 million
Swiss francs respectively.
Since AMS said in December that its Osram bid had been
successful, its shares have lost 70% and Osram's around 30%.
The European auto sector index is 40% lower and the
tech index 20% lower. Apple shares have lost 5% in that
period.
($1 = 0.9659 Swiss francs)
($1 = 0.9142 euros)
(Reporting by Kirsti Knolle, additional reporting by Alexander
Huebner and Arno Schuetze; Editing by Mark Potter and Jane
Merriman)
