(Nov 23): Lattice Semiconductor Corp is considering making an offer for all of Intel Corp’s Altera, people familiar with the matter said, in a twist that could complicate the chip giant’s plans to sell a minority stake in the unit. 

Hillsboro, Oregon-based Lattice is working with advisers and is seeking a private equity backer as it explores a potential bid, according to the people, who asked not to be identified discussing confidential information. 

Buyout firms including Francisco Partners, Bain Capital and Silver Lake Management have also been studying offers to invest in Altera, the people said. Altera could also attract interest from other semiconductor companies, they added.

Bids for Altera are due next week before the US Thanksgiving holiday on Thursday, the people said. 

Any attempt by Lattice to gain control of Altera might prove difficult, given the relatively small size of the acquirer. Lattice has a market value of US$7.48 billion (RM33.42 billion), less than half what Intel would need to break even on the roughly US$17 billion it paid for Altera in 2015.

Offers for a stake in Altera, whose multi-use chips are primarily deployed in telecommunications networks, would likely need to be highly structured, according to the people. Private equity firms are weighing investments equivalent to about US$3 billion, which may come in the form of structured instruments, the people said. That could result in a valuation lower than what Intel paid for Altera, they said.

Santa Clara, California-based Intel reiterated last month that it would look to sell a stake in Altera to an investor before eventually pursuing an initial public offering of the unit — part of a broader plan by the chipmaker to turn its business around. 

Intel had a regularly scheduled board meeting this week and the future of Altera was among the items on the agenda, according to the people. Intel would prefer to sell a minority stake in Altera rather than the entire unit, they said. 

Intel chief executive officer Pat Gelsinger has said the company is aiming to conclude the Altera process early next year and is also reviewing options for other parts of its portfolio.

Deliberations are ongoing and there’s no certainty that Lattice or any of the private equity firms will decide to proceed with offers for Altera, the people said. 

Representatives of Intel, Francisco Partners, Bain Capital and Silver Lake declined to comment. A spokesperson for Lattice didn’t respond to requests for comment. The interest from the three private equity firms was reported earlier by Reuters.

Lattice is led by CEO Ford Tamer, an experienced semiconductor operator who previously served as the president and CEO of Inphi Corp. until its merger with Marvell Technology Inc, which was completed in 2021. He also has a relationship with Francisco Partners, where he served as a senior operating partner before joining Lattice in September this year.

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