Philips Lighting NV shares soared in its market debut after an initial public offering for the Dutch electronics giant raised €750 million ($839 million) for its parent company Royal Philips NV.
Shares of the world’s biggest lighting business rose 8 per cent to €21.61 per share at 10:25 AM. on the Euronext in Amsterdam on Friday, from €20 per share, which is at the middle of the initial price range of €18.5 to €22.50 per share.
In addition, the electronics company was able to make a sale of 37.5 million shares, which is equivalent to 25 per cent of the business, giving Philips Lighting a market value of €3 billion or about $3.3 billion, based on market capitalization. Royal Philips will retain the remaining stake, it said in a statement.
”I am pleased with the response of investors towards Philips Lighting and the successful pricing of the IPO,” Chief Executive Officer of Royal Philips Frans van Houten said in a press release. ”This strategic milestone will allow Royal Philips to focus on the fast-growing health technology market.”
“We have had a fantastic start so far,” Chief Executive Officer of Philips Lighting Eric Rondolat said in an interview Bloomberg TV. “We are looking forward with these new shareholders to continue to expand our global leadership.”
Philips Lighting has already made an announcement in the past, saying that it plans to fully scale down its ownership over the next several years. In 2014, meanwhile, Philips Lighting made known to the public it would be shifting from the lighting industry to health care and technology, focusing on producing equipment and consumer goods such as scanners and shavers.
Meanwhile, the lighting unit dates back to 1891, 125 years ago, when Frederick Philips together with his son began selling incandescent lamps. Now, Philips Lighting is the world’s biggest lighting business. The Dutch electronics giant has divisions that produce traditional light bulbs and light emitting diode (LED) lamps and divisions that design complete lighting systems.
Philips Lighting is now targeting an annual dividend of 40 to 50 per cent of its continuing net income to be paid out in cash, with its first payment expected next year, Royal Philips said in a statement. Its lighting division, reported €547 million in profit in 2015 and €7.47 billion in sales.
The company’s biggest competitors in the production of conventional lighting units and light LED lamps is Osram Licht AG, who has already spun off from Seimens AG, and General Electric Co.