AST Shareholders Form Protection Group

IRVINE —  A group of AST Research Inc. shareholders formed a committee Thursday to monitor the struggling computer manufacturer’s negotiations with would-be acquirer Samsung Electronics Co.

“People are wondering whether this is a fair offer and how the company got into this shape,” said Dan Montano, who described himself as an Orange-based investment banker asked by several AST shareholders to help create a “shareholders protection committee.”

Montano declined to name the investors who contacted him, and acknowledged that he does not own AST shares. He also said the committee is still being formed and had not yet contacted AST.

AST officials declined to comment.

Committee members plan to elect a panel that will request access to AST executives during the negotiations, as well as the chance to review proposals, Montano said. Asked what committee members would do with that information, Montano said that hadn’t been determined.

“They’re interested in finding out the truth,” he said. “Then they’ll worry about how to resolve it.”

AST was for many years one of Southern California’s most prominent high-tech success stories. But the company has been losing market share in recent years, and last week reported a 1996 loss of $418 million.

Samsung, a Korean electronics company, has come to AST’s financial rescue on numerous occasions, and already owns about 46% of the Irvine-based company. Last week, Samsung made an offer to acquire the remainder of the company for $5.10 per share.

Many AST shareholders who bought the company’s stock at much higher prices have criticized Samsung’s offer as too low. One shareholder even filed a suit accusing AST of allowing its financial condition to deteriorate so that Samsung could snap up the remaining shares at a discount.

AST has established a committee of its own to weigh the Samsung offer. The committee comprises three AST board members who are not otherwise affiliated with AST or Samsung.

“No one is saying [those board members] aren’t wonderful,” Montano said. “We’re just saying there are people who paid a lot of money [to acquire AST shares] who want to know more.”

Montano said about 20 AST shareholders have agreed to join the committee, and that none is involved in a suit against the company. “They range from people who have millions of dollars of AST stock to a housewife in Texas who has 723 shares,” he said.

The committee was formed last week, and Montano said he got about 50 calls from other interested shareholders after a news release describing the committee was issued Thursday.

AST is under no obligation to accommodate the upstart committee, Montano acknowledged. “But it would look pretty bad if they refuse to meet with their shareholders,” he said.