Philips Lighting Unit IPO Could Raise More Than $950 Million -- Update
May 16 2016 - 7:32AM
Dow Jones News
By Ian Walker
Koninklijke Philips NV set the pricing for the initial public
offering of its lighting unit on Monday, saying the spinoff could
raise between EUR694 million and EUR844 million ($784.8 million to
$954.5 million) for the company.
The Dutch electronics group said it wanted to sell shares in the
unit at between EUR18.50 and EUR22.50, implying a market
capitalization of EUR2.78 billion to EUR3.38 billion.
The final offer price is expected to be announced May 26, with
unconditional trading in the shares on Euronext Amsterdam set to
start May 31.
Philips is selling 37.5 million Philips Lighting shares, or 25%
of the business, in the float to both institutional and retail
investors. It has also offered the underwriters the opportunity to
buy an extra 3.75% of the business. If these shares are taken up,
the company will raise up to EUR970 million, depending on the final
issue price.
Philips confirmed earlier this month that it would float the
lighting business, which dates back nearly 125 years, as part of
plans to trim the operation and devote more time to its more
profitable and faster-growing health-care business, which competes
with Siemens AG and General Electric Co.
Philips Chief Executive Frans van Houten said that as separately
listed companies, Royal Philips and Philips Lighting will be better
equipped to focus on innovation, entrepreneurship and long-term
growth. Lighting Chief Executive Eric Rondolat said the new company
will be committed to further expanding its global position in the
general lighting market, driving the transition to LED and
connected lighting systems and services.
The lighting business reported sales of EUR7.4 billion last
year, making it one of the world's biggest lighting manufacturers.
The unit comprises a declining traditional lamps operation as well
as a fast-growing division called Lumileds, which makes lighting
with energy-efficient light-emitting diodes, or LEDS.
Philips has previously explored a sale of its lighting business,
but struggled to find a buyer. A deal to sell the Lumileds
operation was agreed at the end of last year, but was terminated in
January when U.S. regulators blocked the agreement on national
security grounds. Philips said last month it hopes to close a new
deal for Lumileds before the end of the year.
For the first quarter of 2016 the lighting division saw
comparable sales decline by 2% as strong growth in LED sales was
offset by a drop in sales of conventional lamps. Philips said the
unit is expected to return to growth in the course of the year as
growing demand for energy-efficient lighting is expected to boost
LED sales.
Write to Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
May 16, 2016 07:17 ET (11:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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