Xilinx Soars on Buyout Hopes
January 21 2016 - 3:10PM
Dow Jones News
Xilinx Inc. shares are on the move Thursday--fully erasing
January's 8.2% decline--following the chip maker's fiscal
third-quarter report. But the results, solid as they were, aren't
the reason.
Instead, it's buyout hopes, which have been a major
semiconductor catalyst over the past several years.
The company disclosed in a regulatory filing made along with
the company's quarterly results that it has entered into
change-of-control agreements with five senior executives, including
Chief Executive Moshe Gavrielov. They detail what the officials
would be in line for in case of a deal.
During the company's quarterly conference call late Wednesday,
Mr. Gavrielov noted that "there's very clearly massive
consolidation" in the chip sector "and the general expectation is
that that will continue." He added that the contract moves merely
put Xilinx's pay practices "in line with those...common for public
companies"--both in his industry and elsewhere.
SunTrust analysts say the development should "drive renewed
takeout speculation and a full valuation." Meanwhile, Pacific Crest
says potential buyers include Avago Technologies Ltd. and Qualcomm
Inc.
A buyout would be welcome for investors which have seen Xilinx
go sideways since mid-2013 after more than triple following the
financial-crisis bottom below $15.
Shares were recently up more than 10% to $47.57, making it the
eighth best performer in the S&P 500 for the day.
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(END) Dow Jones Newswires
January 21, 2016 14:55 ET (19:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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