ASMI Beats Hedge Fund

"So maybe now they will go home and let us get on with our busi­ ness, " crowed Arthm" del Prado, CEO of ASM International, . a Nasdaq-listed Dutch maker of computer chips q,nd equipment-after shareholders on Monday rejected, by a 2-1 ratio, a U.S. hedge fund's plan to break up the company.

Del Prado, who founded ASMI (ticker: ASMI) in 1968 and owns 22% of its stock, was referring to Mellon HEV Alterna­ tive Strategies, a unit of Mellon Financial (MEL), which had forced an extraordinary shareholders' meeting to consider its demand that ASM spin off its chip-making operation, which has lost money in recent years, from its highly profitable semi­ conductor-assembly and packaging-equipment division in Hong Kong. The Mellon fund needed at least 16 million votes to get majority support for its breakup plan, but could only muster a little over 11 million out of more than 32 million cast.

"Naturally we were disappointed," says fund manager Mickey Harley. "But we still strongly believe that additional changes are needed to maximize value for all ASMI sharehold­ ers, and will continue our efforts to this end." ASMI's common, which had risen in the week leading up to the vote, was briefly hammered after it, but by late week had revived to near the 21.34 it had closed at the Friday before the shareholders' meeting.

While she opposed a breakup, Caroline ven del' Giesen, a Dutch Investors Association attorney, said she was disap­ pointed·by management's failure to bring company bylaws into full compliance with U.S.-style rules, as Mellon had also m"ged. "Shareholder trust needs to be restored," she said of ASMI, whose management says both its units now are in the black.

As Barrons has noted (''A Battle Dripping "yvith Irony," Nov. 27), Mellon itself has been under shareholder attack for corporate"governance issues and alleged lack of synergies in its business. At the meeting, Jeffrey L. Farni Sr., a financial consultant representing Minneapolis-based RBC Dain Raus­ cher, an ASMI shareholder, cited the Barron's article.

Opined Farni, "People who live in glass houses shouldn't throw stones. Management ,has done a great job, and we see long-term benefits ahead for us and other shareholders."

- NEIL A. MARTIN