Bloomberg News

ASMI’s Founder Del Prado Is Open to Company’s Breakup

May 16, 2012

ASM International NV (ASM)’s founder and largest shareholder, Arthur del Prado, may be open to splitting the company in two, making a scenario opposed by the company for years more probable, analysts said.

The shares rose as much as 8.9 percent in Amsterdam today, gaining a second day. A lawyer for Del Prado indicated at the annual meeting yesterday that “under the current circumstances, front-end can do fine on its own, albeit synergies still exist,” said Robin van den Broek, an analyst at ABN Amro, who attended the meeting.

In the past Del Prado, who owns 21 percent of ASMI, opposed a breakup, Van den Broek said. ’‘Apparently that vision has changed,’’ said the analyst, who recommends buying the stock.

Investors have pressed ASMI, based in Almere, the Netherlands, to separate its two businesses. The front-end division makes machines used to turn silicon wafers into chips. The company also owns about 52 percent of Hong Kong-based ASM Pacific Technology Ltd. (522), the world’s biggest maker of chip- assembly and packaging equipment, known as back-end gear.

Shares of ASMI surged 7.9 percent to 30.20 euros as of 9:48 a.m., after jumping 10 percent yesterday.

‘Number One Option’

“Now that Mr. Del Prado expressed his favored scenario and also asked the study to be completed within months, management does not seem to have much choice than making this scenario the number one option to have investigated,” said Niels de Zwart, an Amsterdam-based analyst at ING Groep NV. (INGA) “There currently is a vast majority of shareholders in favor of this option.”

De Zwart raised his price estimate on the stock to 38 euros from 32 euros, while maintaining his buy recommendation.

“The company has informed its shareholders that it’s going to undertake a study into the causes of the non-recognition by financial markets of the value of the combined businesses,” Ian Bickerton, an ASMI spokesman, said by telephone today. “We won’t speculate on the outcome.”

Arnold Croiset van Uchelen, a lawyer at Allen & Overy LLP representing Del Prado, wasn’t immediately available for comment.

In May 2010, the company won backing to postpone discussion on its structure, giving it two more years to restore profitability at the front-end operations.

The front-end unit has since introduced technology that gave it a lead over competitors, Van den Broek said. That means companies such as Intel Corp. will have to do business with the front-end division anyway, and being a top 10 semiconductor- equipment seller isn’t as important as in the past, he said.

To contact the reporters on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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