Intel and Altera may resume takeover talks as several shareholders of the latter are willing so. A report from Bloomberg, citing people familiar with the matter, states that several major shareholders of Altera have urged the company to resume talks with the chip maker.
Shareholders asking to resume talks with Intel
In letters to Altera’s management, shareholders including Cadian Capital Management and TIG Advisors have questioned the company’s ability to create value that is equivalent to the offer given by Intel, according to Bloomberg. According to Reuters, with a stake of 2.77% Cadian was Altera’s 10th-largest shareholder as on Dec. 31, while TIG holds around a 1.5% stake in the chip maker, according to Bloomberg.
Last week, there were reports that the talks between Intel and Altera had be halted due to a lack of consensus on a price. CNBC reported last week that Intel’s offer was around the low-$50 per share range.
Analysts expected this
Last week, RBC Capital Markets analysts predicted that this will happen, stating that Altera’s board will be under pressure after refusing the Intel offer. “Investors are going to demand some explanations,” they said. The analysts noted that the chip maker will have to convince shareholders that it has a plan to offer the same or more value as what has been put on the table by Intel.
“If the board and management can’t show a plan that would create a value at or above what Intel is offering, they are going to have to justify why they are saying no,” said an analyst.
If the deal goes through, Altera would be Intel’s biggest acquisition. In 2011, Intel acquired security software maker McAfee for $7.7 billion.
On Monday, Intel shares closed down 0.63% at $31.73, and year to date, the stock is down by almost 13%. On Monday, Altera shares closed at $43.86, giving it a market value of $13.2 billion. Since the takeover talks first came to light in March, Altera’s stock has surged almost 27%.
As of now, there has been no comment from any related party on the matter.