August 21, 2019 / 12:49 PM / a month ago

UPDATE 2-Osram to clear way for AMS takeover offer - sources

* Osram expected to waive standstill agreement

* Supervisory board to meet Wednesday night

* AMS has to give Bafin 10 days to approve offer

* Rival bid expires on Sept. 5

* Osram shares at five month-high (Adds Osram, AMS statements, shares, background)

By Jörn Poltz

MUNICH, Aug 21 (Reuters) - Osram is likely on Wednesday to waive an agreement that currently prevents AMS from making a takeover bid for the German lighting group, paving the way for AMS to take on an offer from private equity investors, sources told Reuters.

Osram shares, which have been hit by profit warnings, doubts over its strategy and a weak car market, rose as much as 3.8% to a five month-high of 36.50 euros.

That is well above the 35.00 euros per share that finance investors Bain Capital and Carlyle Group have offered to pay for the group, but below the 38.50 euros per share Austrian sensor specialist AMS has promised.

For AMS to get a chance to table an offer and make its vision of a global heavyweight in sensors and photonics come true, Osram must waive a standstill agreement the Austrians had previously signed to get a look at Osram's books.

Osram's supervisory board is set to meet later on Wednesday, with staff representatives expected to again voice concerns that a takeover by AMS might lead to job losses, two sources familiar with the matter told Reuters.

However, "a waiver of the standstill agreement is to be expected," one of the sources said.

An Osram spokesman said the company was aiming for any takeover to be an agreed business combination, while not commenting on the prospects of a waiver for AMS.

Osram and AMS reported progress in talks last week after the German group, which has backed the offer from Bain and Carlyle, initially showed reluctance.

Bain and Carlyle have promised Osram can continue as a standalone company under current management, and also made far-reaching promises to the workforce.

AMS has said it would create new jobs in Germany and not touch existing agreements with workers, but also signalled it would sell Osram's digital division and phase-out its consumer general lighting LED business.

"AMS would welcome a waiver of the standstill by Osram," a spokeswoman for the sensor specialist said. "We remain convinced of the merits of our offer."

A waiver would come virtually at the last minute for AMS, which has to give German watchdog Bafin 10 days to examine and approve its offer before it can launch it, but wants to do so before Bain and Carlyle's offer period ends on Sept. 5.

Bain and Carlyle, which sources say are considering raising their bid, declined to comment on Wednesday.

At 1405 GMT, shares in Swiss-listed AMS were up 2.6% at 41.01 Swiss francs. The stock has fallen 40% over the past year, with investors - already concerned about high debt levels and the company's dependence on top customer Apple - seeing a combination with Osram as a risky move.

($1 = 0.9007 euros)

Reporting by Joern Poltz; Writing by Kirsti Knolle; Editing by Emelia Sithole-Matarise and Mark Potter

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