Intel Corporation (INTC)’s Offer Of $54 Per Share Rejected By Altera (ALTR), Ending Talks Of A Buyout


Intel Corporation (NASDAQ:INTC) may have just lost an opportunity to bring Altera Corporation (NASDAQ:ALTR) under its control. People with insider knowledge of the acquisition talks have cited that discussions have hit a snag after Altera said no to buyout offer of $54 a share.

Issues around the buyout talks have mostly been kept away from the public, but what seems to have resulted after all the private discussions is failure to seal a deal. Intel must be frustrate to lose the talks after what is said to have been months of talks. However, some analysts say that Intel could still win in the end as Altera is likely to face pressure to get back to the negotiation table.

All-cash transaction

Fallout in the talks didn’t seem to hurt shares of Altera, a maker of programmable chips. Investors appear to be betting that Altera will be compelled to return to talks with Intel, which offered to pay a premium of 29% on the shares of Altera. Intel is said to have offered to make the transaction all-cash.

Boosting data center and server business

Altera’s chips have wide application in area such as data centers, networking equipment and cars among others. By seeking a union with Altera, Intel Corporation (NASDAQ:INTC) hoped to bring a new lease of life to its most profitable business of supplying chips for servers and data centers. The kind of chips that Altera makes are the same ones being sought by Internet companies such as Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOGL) for networking purpose.

Acquisition of Altera could also give Intel an edge in the seemingly hard-to-penetrate mobile market.

Seeking new growth

The juice is drying up in the PC market and Intel Corporation (NASDAQ:INTC) is busy looking for new growth. The company has in the recent times been trying to court Chinese startups hoping that it will be able to lure them to use its chips instead of those supplied by Qualcomm, Inc. (NASDAQ:QCOM) and other rivals. The company recently introduced a smaller version of its RealSense camera at a developer event in Shenzhen in China, saying that the reduced size makes the camera usable in smartphones.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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