Leading Osram investor criticizes new strategy

Reuters News
Posted: Nov 18, 2015 9:46 AM

FRANKFURT (Reuters) - A leading investor in Osram criticized the German lighting maker's new strategy on Wednesday, saying a planned move into general lighting came out of the blue to shareholders and would dilute profits.

Osram announced last week that it would invest a billion euros ($1.1 billion) in a new plant in Malaysia to make chips for LED (light-emitting diode) lights, dashing investor hopes it would focus on profitable niches such as car and street lighting, after selling its traditional lamps and light bulbs business.

"The shareholders have lost a lot of money and the management has lost a lot of trust," said Michael Muders, fund manager at Union Investment, Osram's fifth-biggest shareholder with just under 2 percent of its shares.

Osram has cut about a fifth of its workforce over the past four years as it slimmed down to compete with Asian rivals.

German monthly Manager Magazin had reported earlier that Muders was "appalled" by the new growth strategy.

Osram shares fell by a quarter last Wednesday, their biggest single-day drop ever, after the company announced its new plans. They have barely recovered, trading at 39.04 euros by 1405 GMT on Wednesday, down 24 percent since the strategy was announced although up 0.7 percent on the day.

"There wasn't the slightest sign they were even thinking of such a strategic U-turn. We feel sidelined," said Muders, adding that he would vote to withhold approval from Osram's boards at the next shareholder meeting in February if the strategy were not changed.

(Reporting by Georgina Prodhan; Editing by Susan Fenton)