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Best known for supplying sensors for Apple's latest iPhones, AMS
had fought a fierce battle versus private equity groups in its
pursuit of the larger Osram, a leader in automotive lighting.
In the end, it managed to collect 51.6% of Osram's stock,
significantly less than the required 62.5% level.
AMS shares reversed early gains and were down 4.3% at 42.83
Swiss francs at 0855 GMT.
Early relief that AMS would not burden itself with billions in
new debt and a complicated integration process was quickly
replaced by worries the company might stick to its takeover
plan, traders said.
"While we regard the failing of the bid as positive for AMS due
to our concerns on the cost and benefits of the acquisition, it
seems unlikely that the matter will end here with another bid
being likely at some point," Liberum analyst Janardan Menon said
in a note to clients.
AMS had been prepared to take on 4.4 billion euros in additional
debt and planned to issue new equity worth 1.6 billion euros to
refinance part of the deal.
AMS is now the largest shareholder of Osram with a direct stake
of 19.99%. It said on Friday it was still committed to pursuing
the acquisition.
Shares in Osram, which became a takeover target after its
strategy of turning itself into a high-tech company focused on
LEDs and state-of-the-art laser chips did not bring the
hoped-for success, fell as much as 4.5% to 39.00 euros, below
the 41 euros that AMS had offered to pay.
Traders had expected a bigger drop and interpreted the smaller
slide in Osram stock as a sign that hopes of a deal remain.
"It might be smart not to sell (Osram shares) aggressively,"
said a trader. "There are still many unknowns including ongoing
talks with AMS and maybe an improved offer by Bain & Advent."
Osram said on Friday it was open to discussing a "meaningful and
mutually beneficial collaboration" with AMS.
At the same time it said private equity groups Bain Capital and
Advent were inspecting its books "with a view to submitting an
offer."
(Reporting by Kirsti Knolle, additional reporting by Hakan Ersen;
editing by Jason Neely)
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