(Bloomberg) — Lattice Semiconductor is considering making a takeover offer for all of Intel’s Altera shares, people familiar with the matter said. That could complicate the semiconductor giant’s plans to sell a minority stake in the division.
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Hillsboro, Ore.-based Lattice is working with advisers and seeking private equity backers to pursue a potential bid, said the people, who requested anonymity to discuss the matter.
Buyout firms including Francisco Partners, Bain Capital and Silver Lake Management are also considering investment proposals for Altera, the people said. Altera could also attract interest from other semiconductor companies, they added.
A bid for Altera is expected next week, on Thursday before the U.S. Thanksgiving holiday, the people said.
Any attempt by Lattice to gain control of Altera could be difficult given the relatively small size of the acquiring company. Lattice’s market value is $7.48 billion, less than half of what Intel paid for Altera in 2015 to break even at about $17 billion.
An equity offer for Altera, which primarily deploys versatile chips in telecommunications networks, would likely need to be highly structured, the people said. The private equity firm is considering an investment worth about $3 billion, which could be in the form of a structured product, the people said. That could result in a lower valuation than what Intel paid for Altera.
Santa Clara, Calif.-based Intel reiterated last month that it would consider selling Altera stock to investors before ultimately pursuing an initial public offering for the unit. The move is part of a broader plan by the chipmaker to turn around its business.
Intel held its regular board of directors meeting this week, and Altera’s future was also on the agenda, according to people familiar with the matter. Intel reportedly wants to sell a minority stake in Altera, rather than the entire division.
Intel CEO Pat Gelsinger said the company aims to complete the Altera process early next year and is also considering options for other parts of its portfolio.
Talks are ongoing, but it is unclear whether Lattice or the private equity firm will decide to move forward with the proposed acquisition of Altera, the people said.
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