Philips Shares Rise on Report Joint KKR, CVC Lighting ZestElco van Groningen
Royal Philips NV rose to a nine-month high in Amsterdam trading after Het Financieele Dagblad reported that KKR & Co. and CVC Capital Partners Ltd. may make a joint bid for the Dutch company’s lighting solutions division.
Philips shares gained as much as 4.3 percent and traded 3.7 percent higher at 25.51 euros as of 12:24 p.m. in Amsterdam, valuing the company at 23.9 billion euros ($27.7 billion). That’s the highest price since April 10.
The private-equity firms are considering a bid that would preempt Philips’ planned spinoff of the world’s largest lighting supplier, the paper said, citing sources it didn’t identify. The buyout group has already made an indicative bid for Philips’ lighting components business that’s being divested separately, the newspaper reported in December.
Steve Klink, a spokesman for Amsterdam-based Philips, declined to comment.
“A spinoff or a sale is less risky for Philips than an IPO,” Peter Olofsen, an analyst at Kepler Cheuvreux in Amsterdam, said by phone. “And if it comes to a sale, I think private equity is the most logical,” said the analyst, who has a hold rating on the company. Based on a sum of the parts calculation, Olofsen estimates the lighting solutions business might be valued at about 5 billion to 6 billion euros.
Philips Chief Executive Officer Frans van Houten in September unveiled his plan to combine the health-care and consumer-lifestyle divisions into a new entity called HealthTech, while carving out the slower-growing lighting unit.
The split from the lighting unit echoes a move by German rival Siemens AG, which spun off its entire lighting division in 2013 as the industry faces competition and shifts towards LEDs, that are smaller and more energy-efficient than traditional bulbs.
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