A consortium that includes Singapore’s Temasek, a Chinese startup and GSR Ventures has formed to bid for Philips’ 2.5 billion euros ($2.6 billion) lighting components business, following a Reuters sources report.
Chinese light-emitting diodes (LED) startup Lattice Power, working with Singapore state fund Temasek and China venture capital firm GSR Ventures, has expressed interest in the business. This could potentially thwart the chances of rival bids from buyout groups, Reuters quoted its sources on the matter.
“They have put in a last-minute bid,” one of the sources said. The bid is expected to have been competitive as it would otherwise have no chance at this stage of the auction.
Another source said it was “unclear if their (the Chinese’s) chances are very big”.
Sources said Philips’ adviser Morgan Stanley aims to enter exclusive talks with one of the bidders early next week, wrapping up a process which started a year ago when the Dutch electronics group combined its so-called Lumileds and car lights divisions into a standalone company.
Spokespeople for Philips, CVC, KKR and Bain Capital declined to comment, while representatives for Lattice, GSR, Temasek and Morgan Stanley were not available for immediate comment.
Lattice Power, a small company which last year secured $80 million in funding by Asia Pacific Resources Development Investment, already has some connection to Philips, as it made James Haworth, a former Philips executive, the head of its US operations.
GSR is a venture capital fund that invests primarily in early and growth stage technology companies with substantial operations in China.
Philips, which has been making light bulbs for 123 years, has vowed to focus on higher-margin activities under pressure from Chinese makers of LEDs.
In 2014, Philips’ Lumileds/Automotive business posted earnings before interest, tax and amortisation of 172 million euros on sales of 1.42 billion euros.