(Updating to recast lead)
AMSTERDAM (Thomson Financial) - ASM International N.V. on Monday filed
documents with a Dutch court outlining a compromise with shareholder activists
over an indicative approaches for its front-end business, ASMI investor
relations spokesman Eric Kamerbeek said.
The compromise filed with the Amsterdam Enterprise Chambers comes out of
meetings the company has had with shareholder activist Hermes Focus Asset
Management Ltd. and now it will wait for the court to make its conclusions.
Monday was the deadline for ASMI to reach an agreement with shareholders, or
risk an extraordinary meeting to discuss dismissing CEO Chuck del Prado.
On Friday, ASMI rejected a combined bid from Applied Materials Inc. and
Francisco Partners worth between $600 million and $800 million, for ASMI's
front-end operations. ASMI said the bid "significantly" undervalues the
operations and "fails to reflect its future prospects."
Analysts said ASMI signalled it was willing to sell its front-end
operations, but for the right price. They said that shareholders would have the
last word on any deal.
"Will (shareholders) wait the (at least two years) time necessary for
strategic measures to kick in and unlock value in the operations? Or take the
value in cash now?" Theodoor Gilissen analyst Win-Yen Choi said.
Choi said management may try to continue defending its position of keeping
both ends, but that it would become only more difficult for Del Prado to silence
shareholders.
Analysts have estimated the value of the operations more than $1 billion.
Kamerbeek told Thomson Financial News that Hermes has given an opinion on
the offer, but declined to comment further.
Kamerbeek also declined to give a time line for the court to make a
decision, saying the court could be "unpredictable".
The courtroom battle was initiated by shareholders led by Hermes after the
ASMI foundation invoked a poison pill tactic effectively thwarting the
shareholders' attempt to dismiss Del Prado.
However, the Dutch media on Monday reported that parties could request to
postpone the deadline, in view of recent developments -- a move analysts called
"logical" and in the interest of all parties.
SNS Securities analyst Victor Bareno said he felt Friday's announcement
increased the chance of a deal between ASMI and Applied Materials, for the right
price.
The analysts said Applied Materials would still be able to pay about $200
million more for ASMI.
"On the other hand, we do not expect Applied Materials to quickly agree with
a price of $1 billion, as the current offer already implies a steep premium
compared to the negative value of Front-end before the offer," Bareno said.
The analyst ruled out a bidding war for the operations, saying that the
right of first refusal means that a competing offer for the activities is not
likely.
SNS increased its price target to 22.50 euro while keeping its rating at
'buy'.
Wing-Yen Choi said it was possible Applied Materials could come out with a
statement, showing "at least some reaction" to ASMI's rejection.
"They could raise the bid price (as) it is clear ASMI management want more,"
the analyst said.
The analyst said that the sale of the front-end would likely lead to the
delisting of ASMI on Amsterdam.
Petercam's Eric de Graaf said ASMI rejected the offer on grounds he found
difficult to agree with, considering the lack of profitability seen recently for
the front-end operations.
"I think the arguments are fairly thin but I understand that that is how
discussions work," the analyst said.
He said ASMI needed to communicate to "the world" whether a compromise was
reached, not reached, or postponed.
Cornelia Messing; cornelia.messing@thomsonreuters.com
cmm/kf1/cmm/kf1
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