AST Reportedly Working on Sale of 20% Stake : Electronics: Analysts say a deal with Samsung would benefit both firms, especially the troubled O.C. computer maker. Neither firm will comment on a trade journal story.

By ROSS KERBER

Jan. 18, 1995 12 AM PT

TIMES STAFF WRITER

IRVINE —

AST Research Inc. is negotiating to sell a 20% stake in the company to one of its suppliers, a trade journal reported this week.

An arrangement being discussed with Korean electronics company Samsung Corp. would give AST a cash infusion and Samsung greater access to the U.S. market, Computer Reseller News reported in its Jan. 16 issue.

The weekly newspaper, based in Manhasset, N.Y., cited sources that it did not identify.

Safi Qureshey, AST chief executive, declined to comment on the report. Samsung officials also would not comment.

AST posted a loss for its latest quarter, blaming difficulties on integrating its worldwide manufacturing operations while battling price cuts by larger competitors such as IBM and Compaq Computer Corp. The company also announced that it would lay off about 500 Orange County workers, close its Fountain Valley assembly plant and shift work to Taiwan.

Stock analysts, who are awaiting AST’s next financial report on Jan. 26, said a Samsung investment in AST would make sense for both sides.

Samsung, based in Seoul, sells memory chips and other components to AST but has failed to capture a significant share of the U.S. market for its own notebook computers, said Mike McGuire, an analyst for the market research firm Dataquest in San Jose.

Worldwide, McGuire said, AST was the sixth-largest seller of notebook computers in 1994.

James Poyner, an analyst at the brokerage Oppenheimer & Co. in New York, said a deal with Samsung could give AST the cash to pay off high-interest-rate loans. And Samsung, he said, “would be getting favorable pricing on components from AST and would learn more about the PC business.”

AST reported a loss of $39.9 million on revenue of $495.4 million for its first fiscal quarter, which ended Sept. 30. That contrasted with a profit of $8.2 million on revenue of $514.4 million for the same period a year earlier.

The company’s stock, which has traded as high as $33 a share in the past year, was trading around $14 Friday morning. By Monday, it had climbed as high as $16.25 a share in Nasdaq trading before retreating to close at $15.50. It closed Tuesday at $15.375.