SAN JOSE, Calif. Investment firm Hermes Focus Asset Management--which wants to break up ASM International N.V. into two parts--is now pushing for new board members at the fab-tool vendor.
ASMI (Bilthoven, the Netherlands), in turn, is pushing for its own board members, including chip executive Ulrich Schumacher.
ASMI has separate front- and back-end units. Hermes and other shareholders want the Dutch firm to break up the front- and back-end units. The front-end operation, which sells equipment to Intel Corp. and others, continues to lose money.
Hermes, according to ASMI, now calls for the following proposals:
1) The dismissal of all five members of ASMI's supervisory board, who are not up for re-election this year.
2) The dismissal of Chief Executive Officer, Chuck del Prado, as a member of the Management Board.
3) The appointment of David Wang, Nicholas Miller, and Seitaro Ishii as supervisory board members.
4) The appointment of Farhad Moghadam, a former executive of Applied Materials Inc., as a member of the
As required by Dutch Law, ASMI will add these items to the agenda of the AGM, scheduled for May 21, 2008 in the Netherlands.
"We regret that Hermes has tabled these proposals which we do not believe are in the best interests of the company, its shareholders and other stakeholders,'' said Paul van den Hoek, chairman of the supervisory board, and del Prado, in a statement.
''The company has made significant progress over the past two years towards improving its front-end profitability. We have met the commitments we made in 2006 for that year and for 2007, and the underlying operating profitability during this period has improved by around Euro 50 million ($79.4 million),'' they said.
ASMI said that it remains committed to achieving ''peer group'' operating margin performance for the front-end unit in 2009. But ASMI also dropped hints that it rejects the break up of the front- and back-end units.
ASMI, in response, also proposed the appointment of Schumacher to the supervisory board. The appointment of Schumacher will be tabled at a board meeting on May 21. If appointed, Schumacher will replace Berend Brix who is stepping down.
Schumacher is the CEO and president of Grace Semiconductor Manufacturing Corp. in Shanghai. His previous appointments include serving as president and CEO of Infineon Technologies AG.
ASMI will also propose the re-election of Johan Danneels as member of the supervisory board.
Based on preliminary figures, ASMI expects first-quarter front-end sales to be in the range of 77-to-83 million euros ($122.3-to-$131.8 million), resulting in a front-end net loss for the quarter.
"As we indicated at the time of our Q4 results, our near-term front-end operating performance is being negatively affected by reduced customer spending and macro-economic pressures, aggravated by the weakening of the U.S. dollar against the Euro," del Prado said. "During this present industry contraction, we continue to take decisive action to refine our front-end cost structure to lower the breakeven point."
In line with the outlook given on Feb. 28, back-end continues to contribute solid results. ''Though sales and profitability in the first quarter of 2008 will be below the fourth quarter of 2007, the sales and profitability will be considerably better than in the first quarter of 2007,'' according to ASMI.