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Altera (ALTR) to Resume Talks with Intel

By: , dated May 18th, 2015

Shares of Altera Corporation (ALTR) were trading up +3.08 or +6.93 percent to $47.50 per share in Monday's premarket after a report from the New York Post said that the Intel (INTC) and Altera have resumed talks on a possible deal. The two companies first entered into discussions in April but could not agree on a price. Altera Corp. stock closed at $44.42 per share, up +0.11 or +0.25 percent in Friday's regular trading session.

Founded in 1983, San Jose, California based Altera Corporation is a domestic manufacturer of integrated circuits. The company focuses on programmable logic devices or PLD's, field programmable gate arrays or FPGAs and complex programmable logic devices or CPLDs. The company's main products include Quartus II design software, Enpirion Power SoC DC-DC power solutions, the Stratix, Cyclone and Arria FPGAs and the the Max series CPLDs. Altera stock is both a component of the Nasdaq-100 and the S&P 500 stock indices.

Santa Clara, California based Intel Corporation is the world's largest maker of semiconductor chips by revenue. Founded in 1968, the company owns a slew of important patents for microprocessors and processors used in most personal computers including the x86 microprocessor series and the Pentium processor. Intel invented the world's first commercial microprocessor in 1971.

According to an article published early this morning by the New York Post, who cited a source with direct knowledge of the talks, the two companies had resumed discussions on a buyout after previous discussions fell through in April. Altera reportedly backed out of the $54 per share takeover offer after Intel originally discussed a price of $58 per share, but downwardly revised its bid.

Talks between the two companies first began in March with reports suggesting a deal for Altera could be worth over $10 billion. The latest figures put a potential buyout of the company by Intel at more than $13 billion. Neither company could be reached this morning to comment on the matter, but according to the New York Post source, talks are expected to resume in the next few weeks.

Intel stands to benefit considerably with the acquisition. The company has been trying to grow beyond the flagging personal computer market, with an Altera acquisition; Intel will gain a foothold in the programmable semiconductor business.

Intel signed a standstill agreement with Altera earlier this year, which explains why the company has not launched a tender offer for Altera after negotiations broke down. Nevertheless, the standstill agreement expires on June 1st, at which time Intel could proceed with a hostile bid for Altera.

Altera stock was trading below $35 per share before news of the potential takeover surfaced. The stock then shot up after talks were announced and has fallen about 12 percent after negotiations failed. This morning's action in the stock, gaining almost seven percent, confirms that both companies could be ready to resume talks, with a potential deal expected in the next few weeks.

Other News About ALTR

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The company's new Spectra-Q engine will improve design productivity for next generation programmable devices.

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Company demonstrated its military radar systems solutions at the IEEE International Radar Conference.

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Jay Hawk Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

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