Philips lighting to launch IPO
17 May 2016
Koninklijke Philips NV set the pricing for the initial public offering of its lighting unit yesterday, saying the spinoff could raise between €694 million and €844 million ($784.8 million to $954.5 million) for the company.
According to the Dutch electronics group it planned to sell shares in the unit at between €18.50 and €22.50, implying a market capitalisation of €2.78 billion to €3.38 billion.
The final offer price is expected to be announced on 26 May, with unconditional trading in the shares on Euronext Amsterdam set to start 31 May.
The sale would see the company sell 37.5 million Philips Lighting shares, or 25 per cent of the business, to both institutional and retail investors.
Underwriters have been offered the opportunity to buy an extra 3.75 per cent of the business. In the event of the shares are taken up, the company would raise up to €970 million, depending on the final issue price, according to commentators.
Philips confirmed earlier this month that it would float the lighting business, which dated back nearly 125 years, under plans to slim down its operations and focus on more profitable and faster-growing health-care business, which competed with Siemens AG and General Electric Co.
Philips' chief executive, Frans van Houten said the decision to split the healthcare and consumer appliances group into two companies would allow Philips Lighting to capture opportunities in the LED lighting market.
"We believe Philips Lighting's future status as a listed entity would strengthen its position as a global market leader in connected LED lighting solutions," he said in a statement. "At the same time, Royal Philips will focus on the exciting and fast-growing health technology market."
Philips Lighting, which manufactures LED, halogen and fluorescent lamps, electronic components and customised lighting systems, contributes around a third of Philips' sales. The lighting business sells its products in 180 countries and operates manufacturing plants in more than 20 countries.