Philips More Likely to Sell Lighting Unit Via IPO Than Private Sale
April 25 2016 - 3:10AM
Dow Jones News
AMSTERDAM—Royal Philips NV said Monday it is more likely to sell
its lighting business via an initial public offering rather than a
private sale, citing improved sentiment in financial markets.
The Dutch electronics company is in the midst of separating its
lighting arm and previously said it was exploring either a sale or
a listing. It has received several offers for the business, which
could be valued by as much as €5 billion ($5.6 billion).
In its latest earnings report, Philips said it tilts toward an
IPO even as it continues to assess proposals in a private sale
process. "With equity markets' sentiment improving compared with
the first couple of months of the year, an IPO increasingly appears
a more likely outcome," the company said. A decision could be
announced "shortly", it added.
Philips is in the final phase of separating its nearly
125-year-old lighting arm and has previously said it expects a sale
to take place before the end of June. The move is part of a wider
strategic overhaul in which the company seeks to focus on its more
profitable and faster growing healthcare-technology activities and
related products.
The Amsterdam-based firm said tax charges related to the
separation of the lighting business contributed to a drop in
earnings in the first three months of 2016. Net profit was €37
million, a drop of 63% compared with the same period a year
earlier.
Adjusted earnings before interest and taxes, the company's
preferred measure of its operational performance, rose to 14% to
€374 million. Sales rose 3% to €5.5 billion.
The company maintained its guidance for 2016, expecting modest
comparable sales growth.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
(END) Dow Jones Newswires
April 25, 2016 02:55 ET (06:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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