AMD Postpones Voting On Manufacturing Spin-Off
The beleaguered chip maker said on Tuesday that only 42 percent of its shares were present at the meeting, held in Austin, Texas. That percentage was lower than the required minimum of 50 percent of its shares.
The move caused AMD's share prices to plunge by nearly 17 percent to $2.00 from $2.40, but shares recovered somewhat late in the trading day to more than $2.15 per share.
AMD blamed itself for the lack of a quorum because it was "too aggressive" in setting a timeline for the meeting.
The special meeting had been called to approve the spinning off of AMD's chip manufacturing facilities into a separate company called Foundry Co.
As part of the split, AMD and Mubadala said it planned to launch a new company, dubbed The Foundry Co., which was to pair AMD and Advanced Technology Investment (ATIC).
ATIC was created in 2008, and is wholly owned by the government of Abu Dhabi. The company focuses on investments in the advanced technology sector, both locally and internationally.
AMD, ATIC and Mubadala in December said Mubadala planned to purchase 58 million shares of AMD's common stock and that AMD would issue an additional 5 million warrants to purchase AMD stock. The two also said that ATIC planned to invest a total of $2.1 billion in its stake in The Foundry Co, including investing $1.4 billion in the company and paying $700 million to AMD.
AMD said 97 percent of the share that voted at the meeting were in favor of issuing additional shares and warrants related to the spin-off, and that all other major closing conditions required to close the transaction have already been met.
In response to a request from Channelweb.com for more information, Michael Silverman, an AMD spokesperson, e-mailed this response:
"The meeting was adjourned to provide AMD with additional time to solicit proxies from its stockholders to establish the requisite quorum for the conduct of business at the Special Meeting of Stockholders. While we all would have preferred that the vote had occurred as originally scheduled, we recognize that the timeline we set for the Special Meeting of Stockholders was too aggressive, and that we ultimately needed to allow more time for stockholders to participate in the vote. We are confident that we will achieve quorum for the rescheduled stockholder vote to be held at 10:00 a.m. CST, on Wednesday, Feb. 18. All parties remain fully committed to closing the transaction, and pending the stockholder vote, expect to close the transaction in the next few weeks."