Headline: Philips (AMS:PHG) unexcited by Internet stock "hype"
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AMSTERDAM, June 3 (Reuters) - Philips Electronics President
Cor Boonstra said on Thursday his company would not become
caught up in the craze for Internet stocks and was unlikely to
buy a company in the sector until the situation stabilised.
Describing as "nuts" some of the market capitalisation to
sales ratios seen in the market, Boonstra said Philips'
shareholder value would not gain from buying such a company now.
However, he did not rule out a move into the sector at a
later date.
"I think things will normalise. At the end of the day, hype
will be replaced by real value," he told a press briefing.
"We are a company with a constant flow of products and we
have to make our money from those products," he added.
Philips has set aside over $3 billion of its cash pile,
principally for semiconductor firm VLSI (NASDAQ:VLSI) and a 50
percent stake in the LCD unit of LG Electronics (KOREA:02610).
Boonstra hinted a boost to its Medical Systems division may
be next.
Philips has also allocated 700-800 million guilders
($329.9-$377 million) to a hi-tech campus in Eindhoven and plans
to build a similar centre in California's Palo Alto for up to
1,500 people and a smaller campus in Singapore.
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