Philips Sells LG.Philips Shares for $2.18 Billion


Philips Electronics sold a partial but significant stake in LG.Philips LCD for 2 trillion won (US$2.18 billion), at the bottom of an indicated pricing range, a source familiar with the deal said on Thursday.

Europe's biggest consumer electronics maker had long made clear its intention to reduce its stake in its flat-panel joint venture with LG Electronics, having said in July it would cut its holding to below 20% from 33% by this year.

Philips now owns a 19.9% stake in LG.Philips LCD after selling overnight 46.4 million shares in the South Korean firm at 43,425 won each, or a 3.5% discount to its previous closing share price.

Philips had said on Wednesday it would sell its shares at a 43,425 won to 44,550 won range, but the final price was only set overnight.

"I was very surprised at the small discount, but I can understand why. LG.Philips had very good earnings results this week, and the outlook is quite good as well," said a fund manager who bought shares in the offering.

LG.Philips LCD on Tuesday reported its strongest profit in 13 quarters, and with shares gaining 62% this year amid expectations amid a healthy outlook for sales of liquid crystal display (LCD) panels.

South Korean investors have speculated about how Philips would go about paring its stake in LG.Philips LCD after a lockup period expired in July, as the Dutch firm has been seeking to increase its cash to pay out billions of euros to shareholders.

Some analysts had expected Philips to sell the bulk of its stake to a strategic investor in Taiwan or Japan, which compete with South Korean flat-panel makers.

Philips said on Wednesday it would book a non-taxable gain of about 500 million euros ($707 million) in the fourth quarter. Citigroup and Credit Suisse were the book runners for the deal.