Hedge Funds and Bad Tactics Kill $4.4 Billion Deal

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The heated auction between buyout firm Bain Capital and Austria’s AMS AG for the German LED-maker Osram Licht AG has ended in no deal, a Bloomberg View reported. The prospect of a transaction being rekindled in the near term looks bleak — though not impossible over the longer run. It beggars belief that a tense round of bidding can culminate in no more than a tangled mess. But this is regrettably often the way with German M&A. AMS, which makes sensors and supplies Apple Inc., made a tactical error last week by raising its offer to 4 billion euros ($4.4 billion) from 3.7 billion euros to pre-empt a possible counter-bid from Bain and fellow private equity firm Advent International. It had already lowered the acceptance threshold (the level of shareholder support it would require before pushing ahead with the deal) to just 63% of Osram’s shares. Read more