Silicon Motion jumps on report MaxLinear in talks to purchase (update)
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Update 6:56am: Adds trading halts for SIMO and MXL.
Silicon Motion (NASDAQ:SIMO) soared 13% in after hours trading on report that MaxLinear Inc. (NASDAQ:MXL) is in talks to purchase the chipmaker. Trading in SIMO and MXL was halted for news pending on Thursday morning.
A deal may be announced in the coming days if negotiations are successful, according to a Bloomberg report. Taiwan-based MediaTek (OTCPK:MDTKF) is also said to be interested in making an offer for SIMO.
The news comes after Bloomberg report last month that Silicon Motion was exploring a sale following interest following after a similar report from Betaville that there was speculation that a mystery buyer was circling the semiconductor company.
Silicon Motion has a market cap of $2.6 billion. An acquisition would be the largest ever for MaxLinear (MXL), according to Bloomberg.
Silicon Motion (SIMO) could be an "easy tuck-in" candidate for most fabless design houses Wedbush analyst Matt Bryson wrote in a note last week.
Microchip Technology (MCHP), Marvell (MRVL) and Broadcom (AVGO) may be potential buyers of SIMO given their exposure to SSD controllers would likely yield cost/design synergies, Bryson wrote. The company could also see possible interest from Qualcomm (QCOM) and Mediatek (OTCPK:MDTKF).
Silicon Motion was scheduled to report Q1 results after the close on Wednesday. Silicon Motion in past quarters has released its results at 6pm. A conference call on 1Q earnings is scheduled for Thursday morning.