U.S. Securities and Exchange Commission
Washington, D.C. 20549
NOTICE OF EXEMPT SOLICITATION
Submitted pursuant to Rule 14a-6(g)
1. Name of the Registrant:
ASM International N.V.
2. Name of person relying on exemption:
Mellon HBV Alternative Investment Strategies LLC
3. Address of person relying on exemption:
200 Park Avenue, Suite 5400, New York, New York 10166
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a-6(g)(1):
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Mellon HBV Alternative Strategies
News Release
Mellon HBV Alternative Strategies Contact: Jamie Brookes
Mellon Financial Centre +44 207163 2146
160 Queen Victoria Street brookes.j@mellon.com
London, EC4V 4LA
Date: 3 May 2006
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Mellon HBV & ASM International
Mellon HBV Alternative Strategies, a registered investment adviser and a
subsidiary of Mellon Financial Corporation, beneficially owns on behalf of
affiliated investment funds and separately managed accounts over which it
exercises discretionary authority, approximately 6.1% of the common stock of the
Dutch semiconductor manufacturer ASM International NV. Mellon HBV intends to
attend the annual general meeting of shareholders of ASMI on 18 May, 2006 and
intends to vote against the adoption of the annual accounts over 2005, the
proposed charge of the 2005 losses to the reserves and the appointments of the
CEO's son Chuck Del Prado to the Management Board and Messrs. Brix and Van
Amerongen to the Supervisory Board.
Mellon HBV believes that the continued significant losses incurred in the
front-end business have not been properly addressed by the current Management
and Supervisory Boards due to a corporate governance structure which does not
promote the maximisation of shareholder value.
Over the past few months Mellon HBV has communicated its concern with respect to
the losses incurred in the front-end business, and the continued practice of
financing these losses by virtue of dividend flows from ASMI's holding in ASM
PT, and debts raised on the basis of the value of the ASMI stake in ASM PT.
ASMI's annual accounts show that an increase of the debt of (euro)150m and the
dividends received from ASM PT of (euro)200m since 2000 have allowed ASMI to
spend (euro)350m on R&D since 2000. Despite these significant investments, the
implied market capitalisation of the front-end business has gradually decreased
from (euro)300m in 2000 to less than zero today. Mellon HBV regards the implied
market view that ASMI's investment in ASM PT to be worth more than ASMI itself
as an alarming development.
Although ASMI's front-end business has demonstrated a good technological
expertise in a selected number of market segments, Mellon HBV believes it has
failed overall to generate satisfactory margins over the last five years.
Combined with a large and broadly allocated R&D budget, this has led to
significant value erosion, which is contrary to industry trends.
Mellon HBV believes a set of actions in the area of corporate governance,
reduced capital spending and changes in corporate structure are required to
reverse the value destruction for ASMI's shareholders. Mellon HBV will continue
its efforts to ask that the Supervisory Board and Executive Board propose
changes in these areas. Such changes should include:
o absent a synergy between the front-end and back-end business, ASMI's
stake in ASM PT should be reduced, the proceeds to be returned in an
efficient manner to the shareholders;
o ASMI's Articles of Association to be brought in line with today's
Corporate Governance Standards, to the extent that outside
shareholders - who represent the majority in the issued share capital
- will have actual influence on important shareholders' resolutions;
o aggressively curtailing R&D expenditures in line with the earnings
capacity of the front-end business;
o a clear roadmap to profitability in line with industry peers, to be
presented to the shareholders including a commitment to looking at all
alternatives for maximizing shareholder value;
o the consideration of an auction process of the front-end products if
it fails to meet fixed targets and predefined milestones;
o strengthening of the Supervisory Board with truly independent members.
Mellon HBV Alternative Strategies LLC
54th Floor o 200 Park Avenue o New York, NY 10166-3399
(212) 922-8200 Office o (212) 922-8955 Fax o companyinfo@mellonhbv.com o
http://www.mellonhbv.com
A Mellon Financial CompanySM
In accordance with Dutch corporate law, Mellon HBV has timely requested the
boards to have the shareholders vote on a resolution to distribute ASMI's stake
in ASM PT during the upcoming General Meeting of Shareholders of 18 May, 2006.
ASMI has put this item on the agenda for the AGM, but has been willing to do so
only for discussion purposes.
With regard to the items of the AGM on May 18, 2006 Mellon HBV intends to vote
against the following proposed resolutions:
1. To adopt the financial statements of 2005:
The statutory accounts of ASM show an accumulated deficit of (euro)147m. At the
same time the company realised a mark-to-market gain in excess of (euro)400m in
2005 only with regard to its ASM PT stake, which total value is now in excess of
(euro)1bn, which has not been reflected in the accounts. The combination of
consolidation of ASM PT and the `masking' of the value of the ASM PT shares
blocks the true and fair view on ASMI's operations and financial position, as
required both under IFRS and Dutch GAAP.
2. Discharge Management Board and Supervisory Board:
Mellon HBV believes the management of ASMI and supervision thereon has been poor
given the high losses incurred during 2005, contrary to trends in the industry,
the inadequate and untimely measures of the Boards to reverse the continuing
loss making trend at the front-end operations, the refusal to update the
substandard corporate governance standards and the choice of selecting new
candidates for the Boards.
3. Appointment of members to the Management and Supervisory Board:
a. The appointment of Chuck del Prado, Mellon HBV believes the
appointment of the son of CEO Arthur Del Prado would further
contribute to the substandard corporate governance practice.
b. Appointment of Berend Brix and Van Amerongen, Mellon HBV believes
given the performance of the company, candidates with a strong proven
track record in corporate restructuring and recoveries are required.
Mellon HBV believes the profiles of Van Amerongen and Brix do not meet
this profile.
c. No credible alternative candidates have been proposed by the
Supervisory Board. The alternative candidates proposed do not meet the
requirements as described in the company's "Supervisory Board
Profile".
4. Authorisations Management Board:
Authorisations to the Management Board to issue shares and grant subscriptions
for common and financing preferred shares, deviation from pre-emptive rights of
common shareholders and issuance of preferred shares can be used as protective
measures to the detriment of the rights of outside-shareholders. Mellon HBV
believes the use of these authorisations is not in the best interest of
shareholders.
Mellon HBV calls upon shareholders to timely register their shares for the AGM
and to voice their opposition against the policy during this AGM. The Record
Date for the AGM is 11 May, 2006. Mellon HBV has engaged MacKenzie Partners as
information agent. Shareholders are invited to contact MacKenzie Partners at the
number listed below with questions with respect to Mellon HBV's position.
MacKenzie Partners will not be soliciting proxies.
Mellon HBV Alternative Strategies is a wholly-owned alternative investment
management subsidiary of Mellon Financial Corporation.
For further shareholder information:
Steve Balet, Executive Vice President
MacKenzie Partners (UK) Ltd.
T: +44 (0) 20 7170 4155
M: +44 (0) 79 5029 7227
sbalet@mackenziepartners.com