Intel representatives have already noted that they are not going to sell the Altera subsidiary entirely, but are looking for investors to sell them a large stake in this developer of programmable matrices. At the same time, informed sources report that Lattice Semiconductor is ready to buy Altera outright, although there may be problems with financing such a transaction.
Image Source: Intel
As Bloomberg explains, the Oregon-based company Lattice Semiconductor cannot boast of a capitalization of more than $7.5 billion, but Intel paid about $17 billion for Altera’s assets in 2015, and will try not to sell itself short until the last moment, if investors can still be found . At the same time, Intel management continues to insist that it will prefer to sell only part of the shares of Altera, and later bring the subsidiary to an IPO, following the example of the Israeli Mobileye, which also belongs to it.
If we talk about the interest of institutional investors, they are collectively ready to pay no more than $3 billion for part of Altera’s shares, so the corresponding amount will be distributed among them according to a rather complex scheme. A deal on such terms is unlikely to value Altera at the same amount that Intel paid for it in 2015. The company’s board of directors is due this week, among other issues, to consider prospects for finding investors for Altera. According to Intel’s plan, the fate of the subsidiary must be determined by early next year. As noted earlier, Francisco Partners, Bain Capital and Silver Lake are showing interest in purchasing Altera shares to one degree or another.
Tellingly, former Francisco Partner senior operating partner Ford Tamer is now CEO of Lattice Semiconductor, a role he took in September of this year, so his interest in buying Altera stems from previous experience discussing various deal options. It will be difficult for Lattice, with its moderate capitalization, to find funds to purchase Altera on terms that are reasonable for Intel, so this scenario remains the most unlikely for now.