Feeds

AMD accepts smaller stake in chip fab spin-off

Lowered assets in ass-covering deal

Security for virtualized datacentres

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. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.