* Osram: AMS offer is financially attractive
* Regards Bain and Carlyle's concept still as more viable
* Osram concerned about AMS's ability to repay debt
* AMS: received positive feedback on international roadshow
* Allianz Global Investors prepared to sell to AMS
* AMS lowers acceptance threshold to 62.5%
(Adds AMS CEO, Osram CEO, Allianz Global Investors, finance
investors)
By Kirsti Knolle and Jörn Poltz
VIENNA/MUNICH, Sept 16 (Reuters) - Osram advised
shareholders to accept a 4.3 billion euro ($4.8 billion) bid
from AMS on Monday, bringing the Austrian sensor
specialist a step closer to taking over the bigger German
lighting group.
AMS, best known for supplying Apple with sensors
for its latest iPhones, this month offered 38.50 euros per share
for the leader in automotive lighting, outbidding private equity
investors Bain Capital and Carlyle Group by 10%.
To reduce dependence on smartphone producers, AMS wants to
combine its business with Osram's to expand in the auto industry
and supply manufacturers with sensors and lighting solutions for
self-driving cars. It has said it would cut Osram jobs outside
Germany, sell its digital business and phase-out its consumer
general lighting LED business.
Osram, hit by profit warnings and a weak car market, had
initially backed the offer from Bain and Carlyle, which had
agreed to maintain it as an independent company with its
existing management and to support its strategic direction.
But the Munich-based company said in a statement
recommending the offer that "the financial attractiveness of the
(AMS) offer was to be weighted higher than points of criticism".
Despite the recommendation there are still reservations at
Osram's headquarters, dominated by doubts about the long-term
business prospects and Osram Chief Executive Olaf Berlien
expressed his by saying he would not sell his shares to AMS.
Osram's biggest shareholder Allianz Global Investors
, which holds a 9.4% stake, is prepared to follow the
advice, a financial industry source told Reuters.
"If there aren't any better options, Allianz Global
Investors will tender its shares to AMS," the source added.
AGI had rejected the bid of 35 euros per share from Bain &
Carlyle as too low before AMS's counterbid. The duo, who have
the option to raise their offer, declined to comment on Monday.
The next largest Osram shareholder is Swiss bank UBS
with a 6.2% stake. Together with HSBC UBS is
providing AMS's 4.2 billion euro bridge financing for the deal.
STRONG SUPPORT
"We have received the very clear feedback that our investor
base as well as new investors are looking towards this
transaction with a very positive attitude," Chief Executive
Alexander Everke told journalists in Munich.
To capitalise on the momentum, AMS lowered the acceptance
threshold of its offer to 62.5% from the previous 70%.
Everke also tried to allay German trade union concerns
regarding far-reaching job cuts, saying that many of the
existing jobs were complementary. However, he did not exclude
redundancies for operational reasons in Germany.
AMS has to take on billions of debt to finance the takeover,
and Osram said paying off the funds could become difficult.
AMS's dependence on key customers meant "that the financial
situation of the combined group may become very strained" if
they switched to others or placed fewer orders.
Osram also voiced doubts whether the Austrian sensor
specialist, whose number of staff is about a third of that of
the German group, will be able to run such a complex takeover.
($1 = 0.9035 euros)
(Reporting by Kirsti Knolle in Vienna, Joern Poltz and
Alexander Huebner in Munich, Editing by Daniel Wallis, Louise
Heavens and Alexander Smith)
HSBC Holdings (HSBA)