Philips Picks Lazard for Potential Home Appliance IPO

(Bloomberg) -- Royal Philips NV has picked Lazard Ltd. to advise on a potential initial public offering of its home appliance business as the Dutch conglomerate considers options for divesting the unit, people familiar with the matter said.

Philips is starting to explore a listing more seriously as markets remain strong and some bidders have faced difficulties conducting due diligence amid the pandemic, the people said, asking not to be identified because the information is private. A deal could value the unit, which produces everything from coffee makers to air purifiers, at around 3 billion euros ($3.6 billion), one of the people said.

Several Chinese suitors are finding it harder to visit the Netherlands due to coronavirus-related travel restrictions, according to the people. While Philips continues to talk to bidders about a potential sale, some are wary of proceeding unless they can conduct factory visits and face-to-face meetings with Philips management, the people said.

Binding bids are expected to be submitted in March, the people said. Philips shortlisted a clutch of Asian suitors in the bidding, inviting buyout firms CDH Investments and Hillhouse Capital as well as Chinese appliance maker TCL Technology Group Corp. to make second-round offers, Bloomberg News reported last month.

A spokesperson for Philips said the appliance unit has received interest from European and Chinese suitors, adding that an IPO is also under consideration. A representative for Lazard didn't immediately respond to a request for comment.

Plans to dispose of home appliances form part of Chief Executive Officer Frans van Houten's efforts to recast Philips as a focused manufacturer of health-care equipment. Van Houten said in October that separating the business was expected to be completed by the third quarter of 2021. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are working on the sale process, Bloomberg reported previously.

An IPO would add to a strong start to the year for listings involving European companies, with the likes of parcel locker firm InPost SA and shoe retailer Dr. Martens Plc seeing strong performance following their debuts last month. A total of $10.6 billion has been raised via IPOs on European exchanges so far this year, a more than 2,000% increase on the same period in 2020, data compiled by Bloomberg show.

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With assistance from Bloomberg