Philips lighting IPO price said to be at lower half of range

[LONDON] Royal Philips NV signaled to investors it will price shares in the initial public offering of its lighting business toward the lower end of the range, according to people familiar with the matter.

Investors were told bids for shares at below 20 euros each risked missing out on the sale, the people said, asking not to be named as the details aren't public. The company had initially set a range of 18.50 euros to 22.50 euros each, valuing the business at as much as 3.38 billion euros (S$5.2 billion).

Philips is selling stock in the division after failing to find a buyer in a private sale process. The shares are scheduled to start trading in Amsterdam on May 27. The flotation underscores Philips's shift toward making equipment and consumer goods for the global health-care market, such as scanners and shavers.

The company is offering a 25 per cent stake in Philips Lighting as a first step, with plans to fully sell its holding over the coming years. The IPO marks the end of an era for Philips, whose lighting history dates back to 1891 when Frederik Philips and his son started selling incandescent lamps.

Shares of the parent company were 1.6 per cent higher at 23.83 euros at the close in Amsterdam, valuing the company at 22 billion euros. The stock is little changed this year.

Philips is one of at least four Dutch companies to be proceeding with IPO plans this year, alongside insurer ASR Nederland NV and infrastructure developer SIF Holding NV.

Dutch companies raised almost US$8 billion from IPOs last year, with more than half coming from ABN Amro's listing, according to data compiled by Bloomberg.

The division initially attracted interest from companies including Blackstone and Onex Corp, a group led by Apollo, as well as Chinese investor GO Scale Capital, people familiar with the matter have said.

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

BLOOMBERG