Philips To Book €500M Gain from LG.Philips Share Sale

Philips Electronics announced it has sold 46.4 million shares (13% stake) of LG.Philips LCD Co. for €1.55 billion ($2.2b), as part of its ongoing plan to divest overseas equity investments. Philips said it will book a €500M gain from the transaction in Q4. Philips plans to use the proceeds to increase its dividend payout and share repurchases, as well as for acquisitions in its core lighting, medical equipment and consumer electronics units. LG.Philips' shares have climbed by more than 60% in 2007 as LCD prices have recovered, following several quarters of falling prices, which resulted in net losses. In July, Philips said it would reduce its stake in LG.Philips to less than 20% during 2007, following the end of a lock-up on its 32.9% stake. In a statement, Philips said it "may decide to sell additional shares to the same financial institutions later today to meet additional demand, if any." Shares of Philips listed in Amsterdam were last up 1.7% to 31.96 in afternoon trading. Philips' ADRs were up 1.8% to $45.27 in thin pre-market trading, after gaining 2% to $44.97 on Tuesday. LG.Philips ADRs fell 5.5% to $24.96 on Tuesday and were down another 3.5% to $24.10 in thin pre-market activity. LG. Philips shares in Seoul closed 0.1% higher to 45,000 won.

Sources: Press release, Bloomberg
Commentary: Rising Panel Prices Bolster LG.Philips • Philips Electronics Hopes To Save Big With Reorganization • LCD Panel Makers, DRAM Producers Could Be Hit By Matsushita Plant Fire
Stocks/ETFs to watch: PHG, LPL. ETFs: EWN
Earnings call transcript: Koninklijke Philips Electronics Q2 2007, LG Philips LCD F3Q07

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