Why Philips Shares Are Surging Today

Koninklijke Philips NV PHG shares are trading higher by around 5% after Exor N.V. bought a 15% stake in the company.

Exor's investment is carried out through on-market share purchases and a deal with a major financial institution and will not lead to any share dilution in Philips.

This investment will allow Exor to nominate one member to the Supervisory Board of Philips, along with several customary conditions.

Although Exor doesn't intend to further increase its stake in Philips in the short term, the agreement offers it an option to boost interest to a maximum limit of 20%.

"Exor's investment in Philips, their long-term outlook and increased focus on healthcare and technology, fit well with our strategy and substantial value creation potential. With our market leadership positions and people-centric innovation capabilities, Philips is well positioned to deliver on our purpose to improve the health and well-being of people, creating value for all stakeholders." said Roy Jakobs, PHG' CEO.

Last month, Philips reported a second-quarter comparable sales growth of 9% year-on-year to €4.47 billion ($4.87 billion), driven by growth across all segments and geographies, and adjusted EPS was €0.28 ($0.305).

Price Action: PHG shares are trading up 4.79% at $21.23 premarket on the last check Monday.