Word on the street is that the negotiations have broken down completely, however that is unlikely at this point.
Altera’s shares are worth $43.33 on the Nasdaq and Intel had offered $50 per share. That represented a 50 percent premium to Altera’s price before news of the talks was first reported on March 27.
It seems that the people causing the problem are Altera which is refusing to do a deal. Wall Street analysts have said that this puts pressure on its board.
However if the deal does not go through there are going to be some very angry investors. Particularly 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.
Intel is also under pressure because of a widespread belief that it needs to buy the smaller Altera. Altera would appeal to Intel for its line of programmable chips, increasingly used in data centres and customised for functions such as providing web-search results or updating social networks.
The deal was expected as part of a chip industry consolidation which started after NXP Semiconductors’ $12 billion merger of Freescale Semiconductor was announced last month.
If the Intel deal had gone through, the takeover would have been Intel’s largest acquisition, topping its $7.7 billion purchase of security software maker McAfee in 2011.