AMD Forced To Postpone Vote On Abu Dhabi Spinoff
This deal has been spinning on the back burner for years now, but
unfortunately for AMD, the whole thing is going to be drawn out just a
wee bit longer. If you'll recall, AMD had struck a number of deals that
would essentially enable it to spinoff its manufacturing plants.
Agreements had been made that would see Advanced Technology Investment,
an Abu Dhabi state-owned venture capital firm, invest $2.1 billion (at
least initially) for a 55.6 percent stake in the joint venture; out of
that chunk, $700 million would head directly to AMD. Additionally,
Mubadala Development Company -- yet another Abu Dhabi government
company -- was planning to "buy 58 million additional shares of AMD and
gain a seat on the company's board."
Earlier this week, AMD attempted to gather enough shareholder votes to approve the spinoff, with "attempted" being the key word here. The chip maker only heard from 42 percent of eligible voters, and obviously a majority vote is needed in order to approve the deal. Of the ones that did bother to cast their opinions, a staggering 97 percent were in favor, and it's easy to understand why. If AMD is finally able to free it hands somewhat from the capital intensive chip production business, that would greatly help the company as it attempts to return to profitability after nine consecutive quarterly losses.
AMD
spokesman Drew Prairie confessed that it was probably responsible for
the gaff: "We had set an aggressive schedule for the shareholder
meeting. In retrospect, it was maybe too aggressive, and we need a
little more time for stockholders to participate in the vote." For now,
the shareholder meeting will be adjourned until February 18th in order
to provide more time for investors to vote. According to Caris &
Co. analyst Betsy Van Hees: "It's just a delay, and a delay that could
consequently push out the closing date of the venture. We were largely
expecting this to be just a formality, so this does certainly give us
increasing cause for concern." It's largely believed that the new date
will lead to complete passage of the deal, and that lingering cash
infusion couldn't possibly come soon enough. After all, rival Intel
just announced that it would be investing $7 billion in new fabrication
plans -- better counter quick, AMD.
Earlier this week, AMD attempted to gather enough shareholder votes to approve the spinoff, with "attempted" being the key word here. The chip maker only heard from 42 percent of eligible voters, and obviously a majority vote is needed in order to approve the deal. Of the ones that did bother to cast their opinions, a staggering 97 percent were in favor, and it's easy to understand why. If AMD is finally able to free it hands somewhat from the capital intensive chip production business, that would greatly help the company as it attempts to return to profitability after nine consecutive quarterly losses.
AMD
spokesman Drew Prairie confessed that it was probably responsible for
the gaff: "We had set an aggressive schedule for the shareholder
meeting. In retrospect, it was maybe too aggressive, and we need a
little more time for stockholders to participate in the vote." For now,
the shareholder meeting will be adjourned until February 18th in order
to provide more time for investors to vote. According to Caris &
Co. analyst Betsy Van Hees: "It's just a delay, and a delay that could
consequently push out the closing date of the venture. We were largely
expecting this to be just a formality, so this does certainly give us
increasing cause for concern." It's largely believed that the new date
will lead to complete passage of the deal, and that lingering cash
infusion couldn't possibly come soon enough. After all, rival Intel
just announced that it would be investing $7 billion in new fabrication
plans -- better counter quick, AMD.
