How many lightbulbs will it take to change Philips’ fortunes?

Philips is seeking to raise as much as €970 million from the initial public offering of a 25 per cent stake in its lighting unit in Amsterdam after a private sale process didn't result in a deal.

Philips is planning to sell 37.5 million shares at a range of between €18.50 and €22.50 per share, the company said in a statement yesterday. That values the lighting business at as much as €3.38 billion. The shares are expected to start trading on May 27th.

Separating the lighting business, which dates back to 1891 when Frederik Philips and his son started selling incandescent lamps, will allow the company to concentrate on the global healthcare market with equipment including scanners and consumer goods such as shavers and toothbrushes.

“The process is well on track,” Philips chief executive Frans van Houten said in the statement. “I am convinced that as separately listed companies, Royal Philips and Philips Lighting will be even better equipped to focus on innovation, entrepreneurship and long-term value-creating growth opportunities.”

Philips is one of three Dutch companies to be proceeding with IPO plans this year, alongside insurer ASR Nederland and infrastructure developer SIF Holding. Dutch companies raised almost $8 billion from IPOs last year, with more than half coming from ABN Amro’s listing, according to data compiled by Bloomberg.

Philips has attracted interest in the division from companies including Blackstone and Onex, a group led by Apollo, as well as Chinese investor GO Scale Capital, according to sources.

On the basis of the offer price range, Philips will raise as much as €844 million from the IPO, rising to €970 million assuming full exercise of an over allotment option.

The lighting division reported adjusted earnings before interest taxes and amortisation of €547 million in 2015 and had €7.47 billion in sales.

– (Bloomberg / Reuters)