UPDATE 2-Proxy advisers oppose 3 Axcelis board directors
(Updates with Axcelis comment)
SAN FRANCISCO, April 18 (Reuters) - Proxy advisory firms Riskmetrics and Glass Lewis on Friday recommended that shareholders of Axcelis Technologies Inc (ACLS.O) withhold votes to oppose election of three directors at an upcoming annual meeting.
Riskmetrics made its recommendation on the grounds that Axcelis, which is currently fending off a $615.6 million takeover bid from Japan's Sumitomo Heavy Industries (6302.T), failed to recommend that shareholders approve a proposal to declassify the board.
Classified boards are harder to dislodge at annual shareholder meetings because directors come up for re-election at different times.
If elected, Axcelis's three board nominees would serve a three-year term each. The board currently has seven directors.
Axcelis's corporate bylaws also say that any nominee who has a greater number of votes withheld than voted in support must offer to resign.
"Axcelis urges shareholders to vote in favor of the nominees to the Axcelis board," said Robert Siegfried, a company spokesman.
Riskmetrics did not comment on Sumitomo's $6 a share bid saying it did not have enough information, but acknowledged in a note that if shareholders follow its recommendation, it may appear to be a protest against Axcelis' stand on the bid.
Axcelis has rejected the Sumitomo bid, saying it undervalued the company and failed to compensate it for the future potential of new products.
"(W)e acknowledge that if shareholders follow our recommendation, it may be unclear if a vote was withheld in protest of the company's classified board or as a comment on Sumi's bid and the company's response thereto," the Riskmetrics note to shareholders said.
The declass proposal was supported by a majority of shareholders at the 2007 annual meeting, Riskmetrics said.
Sumitomo, which initially offered $532 million for the U.S. semiconductor equipment maker and sweetened its bid last month, has not launched a proxy fight with its own dissident slate.
Last month, Sterling Capital Management, which owns about 12 percent of Axcelis shares, said it would withhold its vote because of differences in how the company's board views the Sumitomo offer.
Glass Lewis made its recommendation saying that shareholders should not be prevented from "weighing in" on potential takeover opportunities.
"Consequently, we believe shareholders should send a message to the board, expressing their discontent with the company's unresponsiveness to SHI," Glass Lewis said in a note.
A Sumitomo spokesman declined to comment. (Editing by Ben Tan)
