ASMI Cuts ASM Pacific Stake With $550 Million Share Sale

ASM International NV, a semiconductor service company, sold an 11.9 percent stake in ASM Pacific Technology Ltd. for HK$4.27 billion ($550 million), falling short of investor anticipation of a full spin off of the majority-controlled Asian business.

Shares in the Dutch parent company yesterday fell the most since November 2008 after it announced it would cut its stake in ASM Pacific by no more than 12 percent. ASM International, known as ASMI, placed 47.4 million shares in ASM Pacific at HK$90 each, retaining a 40.1 percent stake, ASM Pacific said in a Hong Kong stock exchange filing distributed today.

“People were anticipating a breakup of the company, and this is kind of a setback,” said Jos Versteeg, an analyst at Theodoor Gilissen Bankiers, before ASM Pacific disclosed detailed terms. “The company decided it still needs ASM PT as a cash cow.”

Investors have been pressing Almere, Netherlands-based ASMI to separate the businesses since the value of the parent fell below that of its stake in ASM Pacific. Arthur del Prado, ASMI’S founder and largest shareholder, signaled last year he may separate the front-end parent company from ASM Pacific.

ASM Pacific shares fell 11 percent, the biggest decline since May 2010, to close at HK$85.85 in Hong Kong trading. ASMI dropped 1.7 percent to 27.37 euros at 9:45 a.m. in Amsterdam.

Merger Options

ASMI said in the filing that it intends to return about 65 percent of the cash proceeds from the divestment to shareholders, using the remainder to strengthen the business.

ASMI makes machines used to turn silicon wafers into chips, while ASM Pacific is the world’s biggest maker of chip assembly and packaging equipment, known as back-end gear. The sale follows a study advised by Morgan Stanley and HSBC Bank Plc after the May 2012 annual general meeting, ASMI said. Alternatives included a full placement or sale of the ASM Pacific stake, a spin-off of ASM Pacific shares and merger options.

The partial placement “is the most suitable step to be taken to address the non-recognition by the markets of the value of the combined businesses,” the company said in a filing. ASMI has no plans to further reduce its stake, company spokesman Ian Bickerton said by phone.

“There is no part two, this is it,” he said.

Before it's here, it's on the Bloomberg Terminal.