Philips is seeking to raise at least €694m by selling a 25% stake in its lighting division in an initial public offering of shares.
In a statement, the company said it would sell 37.5 million shares at €18.50-22.50 per share in an IPO, implying a market capitalisation for the division of €2.78-3.38 billion.
Including debt, Philips Lighting, the world's largest lighting maker, would have an enterprise value of €4.32-4.92 billion, the company said.
Final pricing is set for May 26, with the listing commencing the following day on the Euronext stock exchange under the ticker symbol "LIGHT."
On May 3, Philips announced it would float its lighting unit, after a two-year process of separating the business that was the core of the original Philips company founded in 1891.
Philips CEO Frans van Houten says the lighting business needs independence in order to invest and grow in selling programmable lighting systems and related services to corporate customers.
The division accounts for about a third of Philips' sales but only a quarter of profits
Under Van Houten's five-year tenure Philips' shares have moved mostly sideways, underperforming the benchmark AEX index of blue chip shares by about 10% by the close of trade on Friday.
Investors hope the separation of the two companies may lead to a re-rating of shares.
Philips' remaining business will be focused on healthcare technology, including selling advanced medical scanners and devices, patient monitoring systems and information services to hospitals, as well as consumer health devices and toothbrushes and shavers.
Van Houten has said Philips will sell its remaining stake in the new lighting company over time.
Philips Lighting had adjusted earnings before interest, taxes and amortisation (EBITA) of €547m in 2015, on sales of €7.47 billion, the company said.
"We believe we present a solid investment case," said Lighting chief executive Eric Rondolat in a statement.
Rondolat will remain in the top job at Lighting after the IPO.
He must manage the company's transition from conventional lighting, a shrinking market in which it is by far the largest company by sales, to the fast growing market for LEDs, where Philips is also currently biggest but faces eroding margins.
Competitors include General Electric of the US and Osram Licht from Germany, as well as Japan's Nichia, Cree and Acuity Brands of the US, and a slew of small but growing Chinese manufacturers.
