Lattice Semiconductor Eyes Bold Move with Potential Full Acquisition of Intel's Altera Division

Reports indicate that Lattice Semiconductor Corp. is contemplating a full acquisition bid for Intel Corp.'s Altera division, which could complicate Intel's existing plan to sell only a minority stake in the business. According to anonymous sources, the Hillsboro, Oregon-based Lattice is working closely with advisors and seeking backing from private equity to explore possible acquisition options.

The sources reveal that firms including Francisco Partners, Bain Capital, and Silver Lake Management are also evaluating potential investment bids for Altera. Additionally, it's suggested that other semiconductor companies might have an interest in Altera. Bids for Altera are expected to be submitted by the Thursday before the U.S. Thanksgiving holiday next week.

Despite Lattice's relatively smaller scale, any attempt to gain control of Altera might prove challenging. Lattice has a market valuation of $7.48 billion, considerably less than the approximately $17 billion Intel paid for Altera in 2015. Sources suggest that any offer to acquire shares in Altera would require a highly structured proposal, given that Altera's versatile chips are primarily used in telecommunications networks. Private equity firms are reportedly considering investments around $3 billion, possibly using structured financial instruments, which may lead to a valuation lower than Intel's original acquisition cost.

The current discussions remain tentative, and it is uncertain whether Lattice or any private equity firm will proceed with a formal bid to acquire Altera. Intel, Francisco Partners, Bain Capital, and Silver Lake have all refrained from commenting on the matter. Lattice's spokesperson also did not respond to requests for comment.

Intel has reportedly taken steps to spin off Altera as a separate entity and has initiated processes to sell a stake in the division in recent weeks. Discussions are said to be in the early stages, with Intel planning to accept preliminary offers from potential buyers in the coming weeks. Intel's concerted efforts to reposition itself through strategic divestitures come after experiencing a significant decline in share price and market share.