NEW YORK (TheStreet) -- Shares of lighting products manufacturer Cree (CREE) popped 5.02% to $36.63 in morning trading Thursday after Dutch electronics company Philips (PHG) garnered interest from several private equity groups for the majority of its lighting components business, according to Reuters.
Philips is putting the business up for sale as it turns its attention to higher-margin activities, Reuters reported. Groups interested in acquiring the business include Bain, CVC, CD&R, KKR and Onex. These groups made indicative offers earlier in the week that valued Philips' lighting components business in a range of 2.5 billion euros ($3.1 billion) to 3 billion euros (or approximately $3.75 billion).
The lighting business sale could be a positive indicator for Cree, which manufactures lighting products, LED components, and semiconductor products for power and radio-frequency applications.
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Separately, TheStreet Ratings team rates CREE INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CREE INC (CREE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."