Earlier this year, Intel entered into an agreement with Altera that will expire on June 1, and after that, the chip maker will have an option to offer an inimical takeover bid, says a report from Reuters, which cites sources aware of the development. The agreement might be the only reason Intel has not yet launched a tender offer for Altera’s shares after their negotiations ended on a sour note.

Intel Corporation May Come With A Hostile Bid To Take Over Altera [REPORT]

Intel could make a hostile bid

In April, Altera turned down an unsolicited $54 per share offer from Intel after several months of negotiations, says the report. Altera reportedly entered into the discussion only on the condition that Intel would not go public with any offer until June. The existence of such an agreement reflects the risks Altera would have to face post the expiration.

In February, Intel’s bid was $58 per share, which was based on publicly available information, says the report. The non-disclosure agreement and non-public information, along with the company’s outlook, resulted in Intel revising down its offer. Altera posted a sequential drop of 9% in revenue for the first quarter and expects weakness in the second quarter, primarily around its wireless business.

Altera shareholders in favor of deal

Altera is facing pressure from its own shareholders to reconsider the takeover bid from Intel. After Altera turned down the possibility of any potential merger, TIG Advisors LLC, an investment firm holding a stake in Altera, questioned a recent nomination to the company’s board of directors and appealed to shareholders to vote against Altera’s lead independent director, T. Michael Nevens, who is against the deal.

Altera designs programmable chips used in cellphone towers and would enable Intel to expand into new markets with the personal computer industry losing its sheen. Both Intel and Altera already work in close collaboration, and in 2013, Intel announced it would start manufacturing Altera’s ARM-based Quad core Stratix 10 processor. Then, the following year, the partnership was further strengthened with a multi-die device which integrates Altera’s FPGAs and systems-on-a-chip (SoCs) with other components—from memory to application-specific ICs, to processors—into a single package.

As of now, there is no word from either of the parties involved.