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Leading worldwide supplier of high performance sensor solutions, ams AG, has announced that it expects its Public Offer of an all-cash takeover bid for the acquisition of OSRAM Licht AG (OSRAM), to be completed in the second quarter of 2020. ams also expects to close its EUR 1.65 billion ordinary capital increase to partially finance the transaction (Rights Issue) during the same tenure.
The only remaining closing condition relates to the receipt of the required regulatory approvals. In the meantime, ams has increased its direct shareholding in OSRAM to 23.4% funded from existing cash resources, which further demonstrates the commitment to closing the Public Offer and realizing the combination of ams and OSRAM.
The Rights Issue is proceeding pursuant to the terms set out in the prospectus published on 13 March 2020. The Rights Issue is fully underwritten by a syndicate consisting of the same banks that have also underwritten a fully committed acquisition bridge facility of up to EUR 4.4 billion; this syndicate comprises of UBS, HSBC, BofA Securities, Citigroup, Commerzbank, Deutsche Bank, Morgan Stanley and Erste Group. ams has thus secured all necessary funding for completing the Public Offer.
Through its ongoing contact with investors since launch, ams has received positive feedback from a number of large existing shareholders who seek to exercise their subscription rights, as well as other investors who are looking to participate in the Rights Issue. Supported by the 99.6% shareholder vote at the Extraordinary General Meeting in January 2020, the Rights Issue will facilitate a long-term, sustainable capital structure commensurate with the combined business profile of ams and OSRAM post-closing.
ams benefits from a resilient cash flow profile and adjustable cost base. This, in combination with a strong liquidity position, ensures flexibility to address any immediate disruptions caused by Covid-19. In line with a recent press release, ams reconfirmed its financial expectations for the first quarter 2020 with revenues of USD 480-520 million and an adjusted operating (EBIT) margin of 19-21% while ams continues to actively monitor the impact of Covid-19 on its business operations.
According to Alexander Everke, CEO of ams, the company is more convinced than ever of the compelling strategic logic and value creation potential of combining ams AG and OSRAM based on the ongoing interactions with OSRAM to prepare for post merger integration. This logic is unaffected by the current capital market and end market environment attributable to Covid-19. ams AG continues to receive positive feedback from its shareholders regarding the strategic rationale and the capital increase.