AMD Shareholders Vote to Allow "The Foundry Company" Spin Off

From DailyTech: Shareholders of Advanced Micro Devices have approved the financial transactions necessary for the formation of "The Foundry Company" at a second special vote in Austin, Texas. This allows AMD to spin off its fabs into a joint venture with the Advanced Technology Investment Company (ATIC), wholly owned by the Emirate of Abu Dhabi.

At the first special meeting on February 10, only 42% of AMD's shares were presented. This shook investor confidence in AMD's ability to close the deal, leading to a sharp drop in AMD's stock price. AMD has been criticized for not allowing enough time for shareholders to prepare and submit their votes.

There were a total of 608,725,020 outstanding shares of AMD stock on January 15, the date of record to denote those shareholders who were eligible to vote. Of that total, only 305,951,749 shares were actually registered to vote by proxy or present at this second special meeting. This means that only 50.26% of outstanding stock was actually presented, barely passing the required majority to form a quorum.

The final results were 289,045,519 shares in favor, 7,269,962 shares against, and 9,636,268 shares abstaining. 94.47% of shares presented voted in favor, but the low turnout means that only 47.48% of all outstanding shares were actually voted in favor of the deal, which is expected to close by March 2, 2009.

The approved transactions include the issue and sale of 58 million shares of AMD's common stock to West Coast Hitech (WCH), a Cayman Island based holding company. It is a wholly owned subsidiary of Mubadala Development, a sovereign wealth fund owned by the government of Abu Dhabi. WCH currently owns 8.05% of AMD due to an earlier investment. Due to rules set out by the Securities and Exchange Commission, this meant that the acquisition of the additional shares required a special vote by shareholders, which have now allowed WCH to own 16.05% of AMD when the deal closes.

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