UPDATE 1-AMS rights issue ‘rump’ offered to market

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FRANKFURT, March 31 (Reuters) – Investment banks underwriting a 1.75 billion Swiss Franc ($1.81 billion) rights issue by Austrian sensor maker AMS on Tuesday launched a sale of shares not taken up in the fundraising as many investors had shied away from it during a global equities slump.

AMS said on Tuesday that it had sold 62% of the new shares to investors, meaning that the banks organising the deal had to take the remaining shares onto their books.

The underwriters immediately launched a sale of this so-called rump of 38% of the new shares and guided investors to expect a price between the issue price of 9.20 Swiss Francs and the market close of 9.54 Swiss Francs.

That implied a deal size of 666-690 million Swiss Francs.

AMS needs the proceeds of the rights issue to help to finance a takeover of German lighting group Osram.

Just as the deal was launched global equities markets were rocked by fears over the economic impact of the coronavirus pandemic. Despite a large discount for the new shares on sale, AMS stock slipped below the offer price several times during the subscription period.

HSBC and UBS organised the rights issue as global coordinators with the help of Bank of America, Citi, Commerzbank,, Deutsche Bank Morgan Stanley and Erste Bank. ($1 = 0.9652 Swiss francs) (Reporting by Arno Schuetze in Frankfurt Editing by David Goodman and Jane Merriman)