On 07/05/2012 11:41:27,
Thanks for the article. Rowan makes a good point re capital gains and dividend taxes and how this can diminish the realisable value of an asset. Also consider the following,
- As per article caveat, is ASMP simply being mis-priced by the market? Possible explanations include poor share liquidity/ scarcity value/ index inclusion at 100% of market cap etc.
- Is the market entitled to value the parent company at zero or negative due to the atrocius returns through the cycle, ageing technology, and the poison pill that exists to prevent change. Its conceivable that the parent company will continue to exist ad infinitum and consume shareholder capital for little or no return.
- Are there accounting irregularities at ASMI we don't know about?
I also think the Applied Materials bid can be discounted. Since in partnership with private equity I am guessing it was highly leveraged and designed principally to benefit the debt providers over a finite 3-5 year period. Post Lehman the higher coupon rate on the debt alone would probably make it unworkable.