Silicon Motion jumps on report MaxLinear in talks to purchase (update)

SSD drive - State solid drives isolated on white background

Bestgreenscreen/iStock via Getty Images

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.

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.