Intel Corp, Altera Corp resume buyout talks

Chipmakers Intel Corp and Altera Corp have resumed talks over a possible deal worth over $13 billion, according to the New York Post. Earlier discussions failed to click as the companies could not agree over the price, Reuters reported in April.

Altera's shares shot 7 per cent to $47.50 in pre-market trading yesterday, while Intel's shares rose slightly at $33.15.

The newspaper, which cited a person familiar with the matter said, one way of the other, an outcome was expected in a few weeks.

Reports of the two companies being in discussion first surfaced in March and media reports suggesting a potential deal could be worth over $10 billion, making it Intel's biggest acquisition ever.

Altera Corp shares were up to their highest value in around four years after the New York Post reported that talks resumed about a possible buyout by Intel Corp.

According to commentators, Intel, the largest chip maker in the world, had been looking for growth beyond the struggling personal-computer market.

A resolution of the discussions with Altera would come in a few weeks, the New York Post said, citing an unidentified person with direct knowledge of the talks.

Shares of Altera, which makes a broad range of low-power programmable semiconductors, vaulted 5.7 per cent to $46.93 at the close in New York, the highest price since 7 July, 2011.

Altera rejected a $54 a share offer from Intel last month, according to people familiar with the negotiations at the time. The stock had gained 2.5 per cent since reports of the talks breaking off suggesting that investors were anticipating the discussions may resume.

According to commentators, with the acquisition of Altera, Intel may be able to defend and extend its most profitable business: supplying server chips used in data centres.

While sales of chips for PCs were in decline as more consumers relied on tablets and smartphones to get online, the data centres needed to churn out information and services as those mobile devices were driving orders for higher-end Intel processors and ensuring profitability.

Sales at Intel's data-centre came in 19 per cent higher in the first quarter as Internet companies such as Google Inc and Facebook Inc built out their server operations.

Intel's stock rose 1.3 per cent to $33.41.