Feeds

AMD accepts smaller stake in chip fab spin-off

Lowered assets in ass-covering deal

SANS - Survey on application security programs

AMD will get a smaller stake in spinning-off its manufacturing arm into a separate wafer fab company and get less cash from the investment firm injecting funds into the deal.

AMD logo

The struggling chip maker today announced a revised pact with the two Abu Dhabi firms behind the deal, ATIC and the Mubadala Development Company.

The value of AMD's assets being contributed to the spin-off biz, dubbed "The Foundry Company," have been cut, reducing AMD's stake in the venture to about 34.2 per cent from its original take of 44.4 per cent.

ATIC will now own approximately 65.8 per cent of The Foundry Company stock. However, both companies will retain equal voting rights at the close of the transaction, AMD said.

Meanwhile, investment firm Mubadala has been watching AMD's stock price and has haggled for a more contemporary deal. The firm will no longer pay a fixed price of $314m for 58 million AMD shares as previously agreed. Instead, it will either pay a per-share rate of the average price of 20 days leading up to December 12 or the average price 20 days before the deal closes — whichever is lower.

Obviously, things have changed since the ink dried on the deal's first draft. AMD shares were trading at about $4.59 each on October 7, the first trading day after the spin-off was announced. As of last Friday, they closed at $2.13 per share.

The chip maker will also issue Mubadala an extra 5 million warrants to purchase AMD stock, for a total of 35 million warrants. ®

AMD is making quite a few concessions here, but when treading water it's rarely wise to be overly-fussy about the size of the life preserver. The chip maker hasn't made a profit in several quarters and could really stand to deflect its huge chip production costs. Chip sales haven't been as promising as Wall Street would like either. Just last week, AMD lowered its Q4 guidance by 25 per cent. ®

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.