Bain Capital and Advent International are preparing a fresh offer for German lighting maker Osram, ratcheting up a bidding war with Austrian sensor maker AMS.
The two buyout companies will spend the coming weeks conducting due diligence, before deciding on a binding proposal, Osram said in a statement on Wednesday, confirming an earlier report by Bloomberg News.
The offer will "meaningfully" exceed AMS's 38.50 euros-a-share bid worth 3.7 billion euros ($4.1 billion), Osram said.
Bain's pursuit of Osram has fresh momentum after the company teamed up with Advent as a replacement for earlier partner Carlyle Group, which backed away.
The private equity firms will need to snatch the initiative away from AMS, which trumped an earlier offer and won the support of Osram's board.
The door is open to a comeback. Management of the German lighting maker expressed some reservations about AMS's proposal and Osram's workforce had come out in favor of Bain and Carlyle. Today's indicative offer played to union's concerns.
"We believe the future of Osram needs to be well aligned with all stakeholders, including unions and employee representatives," Bain and Advent said in a letter to Osram, cited in the release.
The buyout group is prepared to "make clear commitments in this respect," according to the release, adding that the board of Osram wants the non-binding offer from Advent and Bain to be "further concretized."
AMS CEO Alexander Everke has been speaking with his investors across Europe, the U.S. and Asia to build the case for buying Osram.
He said last week that his planned takeover of the company garnered "strong support," prompting AMS to lower the minimum acceptance rate for its offer to 62.5 percent from 70 percent. He needs the backing of shareholders to push through a capital raise to finance the deal.