TCL Mulls Bid for ASMI's $1 Billion Asian Arm Stake

(Bloomberg) -- Chinese electronics giant TCL Corp. is weighing a bid for ASM International NV’s remaining stake in its listed Asian affiliate, as the Dutch semiconductor-equipment maker faces pressure from activist investors, people familiar with the matter said.

TCL has been working with an adviser to explore making an offer for the 25 percent stake in Hong Kong-listed ASM Pacific Technology Ltd., the people said, asking not to be identified because the information is private. The holding is worth about $1 billion based on Friday’s closing price, data compiled by Bloomberg show.

The Chinese company, which makes everything from smartphones to refrigerators, is seeking to transform itself into a global technology powerhouse by building and buying key device parts. TCL Chairman Li Dongsheng said last year he wants it to be the world’s biggest television maker in five to 10 years and to make advanced organic LED screens for iPhones.

Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said.

TCL’s investor-relations office didn’t immediately reply to emailed queries, while an external spokeswoman for ASM Pacific said she couldn’t immediately comment. A spokesman for ASMI said the company continues to believe in the strategic value of its ASM Pacific stake. He declined to comment on whether ASMI had received any interest in the holding.

ASMI said in a statement issued later on Friday that while the company has been approached “from time to time” by parties interested in the stake “at this point in time there is no ongoing process with respect to a potential sale of part or all of ASMI’s stake in ASMPT.”

ASMI rose 3.1 percent to 44.75 euros at 5:12 p.m. in Amsterdam on Friday after earlier jumping as much as 6.2 percent, the biggest intraday gain since June. TCL rose 1.4 percent at close in Shenzhen.

Activist investors Elliott Management Corp. and Eminence Capital have been pushing ASM International to sell its ASM Pacific shares, people familiar with the matter have said. In April last year, it sold a 5 percent holding in the affiliate, followed by another 9 percent stake in November.

ASM International machines are used to turn silicon wafers into chips, sometimes called front-end equipment, while ASM Pacific produces chip assembly and packaging machinery, known as back-end gear.

--With assistance from Crystal Tse and Ruben Munsterman.

To contact the reporters on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.net;Aaron Kirchfeld in London at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Amy Thomson, Matthew Monks

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