ASMI Soars After Founder Drops Opposition To Company's Split
17 May 2012 - 1:04AM
Dow Jones News
ASM International NV's (ASM.AE) shares surged to a six-week high
Wednesday after founder and major shareholder Arthur Del Prado
dropped his opposition to splitting up the chip-equipment
manufacturer.
Del Prado, who owns 22% of ASMI, on Tuesday said on the
sidelines of the company's annual general meeting that both the
front-end and back-end divisions must be able to stand on their own
feet, a spokesman confirmed, after newspapers reported the
comment.
The front-end division produces machines for the first phase of
chip manufacturing, while the back-end division makes equipment for
the assembly and packaging of semiconductors. Back-end production
is carried out by 52%-owned Hong Kong-listed ASM Pacific Technology
Ltd. (0522.HK), which is worth more than ASMI itself, leading to
calls from certain shareholders to break up the company.
Del Prado also said he supports an investigation requested by
shareholders to look into ASMI's undervaluation.
At 1423 GMT, ASMI's shares were 7.8% higher at EUR30.18.
Analysts said Del Prado's comment represents a surprising
turnaround, because he had been fiercely opposed to a break-up,
pointing to synergies from keeping both divisions in one
company.
Several years ago, Del Prado fought a bitter battle with
private-equity shareholders, who wanted to split ASMI and release
the hidden value represented by ASM Pacific Technology's higher
valuation.
Rabobank analyst Philip Scholte said Del Prado's latest comments
raise the chances of a change to ASMI's company structure. He has
raised his rating on the stock to buy from hold, and his target
price to EUR35 from EUR28.
ING analyst Niels de Zwart said he expects a vast majority of
ASMI's shareholders to support a split as the most likely future
scenario for the company. He has a buy rating on the stock and a
EUR38 target, and ASMI has been put back on ING's list of favorite
Benelux stocks.
-By Ben Zwirs and Robert van den Oever, Dow Jones Newswires;
+31205715201; robert.vandenoever@dowjones.com
Asm (NASDAQ:ASMI)
Historical Stock Chart
From Apr 2024 to May 2024
Asm (NASDAQ:ASMI)
Historical Stock Chart
From May 2023 to May 2024