Lighting Industry, News

Are the vulture capitalists circling Philips Lighting?

Look in the sky, it's a bird, it's a plane, it's a vulture capitalist! Are the rescuers swooping down at Philips? Above, CEO Frans van Houten (centre) looks up as Philips shows off its new logo in Nov., 2013.

Philips CEO Frans van Houten may be getting a step closer to his wish of finding ‘alternative ownership’ for the company’s venerable lighting division.

Dutch daily newspaper Het Financieele Dagblad reported earlier this week that private equity firms KKR and CVC could be preparing a joint bid for the operations, Bloomberg wrote.

The stock market put some credibility in the report, as Philips shares jumped to a 9-month high, rising by 4.3 percent at one point in the hours after the news broke, Bloomberg pointed out. ‘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,’ it reported.

The share price had climbed a bit more by the end of the week, as Bloomberg showed it trading late today at 26.62 euros.

As we reported here at Lux last autumn, Philips is looking to hive off its lighting division, a group that has made impressive technological strides into modern LED lighting, but which is struggling to turn a profit as it carries the costs of its traditional lighting business.

It’s plausible that internet companies might want to own a piece of Philips, given lighting’s move into connected, digital technology. LEDs are light emitting diodes that respond well to remote, wireless commands to turn on and off, change colours and brightness, and to serve as nodes in information networks.

New York-based KKR and London- and Luxembourg-based CVC are known for leveraged buyouts and for selling companies on. They did not publicly confirm any interest in Philips, and Philips delclined to comment to Bloomberg.

Don’t rule out internet money yet.

Photo is from Philips via Flickr