"CNBC" reports that US tech giant Xilinx (Nasdaq: XLNX) has hired Barclays to advise on a bid to acquire Israeli Infiniband and Ethernet connectivity company Mellanox Technologies Ltd. (Nasdaq:MLNX). Yokneam based Mellanox, founded by CEO Eyal Waldman, saw its share price jump by more than 5% on Wall Street this morning to $93, giving a market cap of just under $5 billion. Two sources told "CNBC" that any deal would likely be for $5.5 billion, a 10% premium on the current market price.
"CNBC" said that according to people familiar with the matter, Xilinx had already approached the Israeli chipmaker with an offer, continuing a trend of consolidation in the semiconductor industry.
A deal isn't imminent and may not come together, the people, who asked not to be named told "CNBC" because the discussions are private. If a transaction does happen, it's expected to be announced in December, two of the people said.
Buying Mellanox would give Xilinx a broader array of products to sell into the data center market. Mellanox reached a settlement with activist investor Starboard Value earlier this year that placed three new directors on its board.
CNBC reported on Oct. 25 that Mellanox had hired a financial adviser to seek a sale after receiving takeover interest. Analysts at Piper Jaffray named Xilinx, Intel and Broadcom as three potential buyers in an Oct. 26. Sources told CNBC that parties other than Xilinx may be interested in Mellanox.
Xilinx and Barclays declined comment to "CNBC"
Published by Globes, Israel business news - en.globes.co.il - on November 7, 2018
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