A shareholder plan to break up chip-equipment maker
(ASMI - Get Report) has won the support of a key ally a few weeks before investors will have a chance to vote on the matter.
Institutional Shareholder Services, an influential proxy advisory firm, endorsed a plan that would divide the struggling Dutch company into two separate firms, saying that ASMI's management has "by its own actions, lost investor confidence."
The plan to break up ASM is being advanced by Mellon HBV Alternative Strategies, an institutional shareholder that has owns a 7.7% stake in the company.
concluded in early October
that "a change in its current business model" is not in the best interest of shareholders. Shareholders will have a chance to vote on the matter at a meeting in the Netherlands on Nov. 27, although the vote will be nonbinding.
Shares of ASMI were recently up 1.7%, or 35 cents, to $20.45.
ASMI, which recorded $860 million in revenue last year, sells semiconductor-fabrication tools to dozens of chipmakers, including
(INTC - Get Report)
Advanced Micro Devices
(AMD - Get Report)
(TXN - Get Report)
ASMI's revenue is split roughly in half between two distinct businesses: so-called "front end" wafer-fabrication equipment and "back end" chip assembly and packaging tools. But the front-end business, in which new products require large investments to develop and can take years before providing a return on investment, has been unprofitable for the past five years, stunting the company's growth.