Rumors are circulating that AMD is trying to buy Xilinx. Rumors are that the deal could be valued at over $30B. The rumors appear to be credible at some level. The rumors can be traced back to Cara Lombardo and Dana Cimilluca of the Wall Street Journal. Source: https://www.wsj.com/articles/amd-is-in-advanced-talks-to-buy-xilinx-11602205553
RBC Capital analyst Mitch Steves keeps his Outperform rating on AMD (AMD) following the report by The Wall Street Journal about its takeover discussions with Xilinx (XLNX). The analyst notes that an all-stock deal format is more likely, which would place AMD “into a trading range” until the transaction closes or gets approved. Steves adds however that longer-term, Xilinx is a “solid target” for AMD as it primarily competes with Intel’s FPGA business, and “Intel has had numerous struggles with pushing to higher-end tech while AMD has surpassed Intel over the past 1-2 years”.
Citi analyst Christopher Danely keeps a Neutral rating on Xilinx (XLNX) with a $107.50 price target following reports that AMD (AMD) is in advanced talks to buy the company for more than $30B. This would represent a roughly 20% premium to Xilinx’s current stock price of $105.99, Danely tells investors in a research note. The stock in premarket trading is up 16.5%, or $17.56, to $123.55. While the deal would be accretive to AMD given its low margins, there is a “good chance” Xilinx management is against being acquired given its dominant and improving position in the high-margin programmable logic device market, says the analyst. Qualcomm (QCOM) reportedly made an offer to buy Xilinx several years ago, which if true was likely turned down, and Xilinx management is likely to do the same to AMD, contends Danely. He believes Xilinx management is against getting taken out.
Xilinx (XLNX) likely doesn’t want to sell itself, CNBC’s Jim Cramer said following reports that AMD (AMD) is in advanced talks to buy the chipmaker. “I have to believe that Xilinx, which I had on recently, doesn’t want to sell.”
Stacy Rasgon of Bernstein and Patrick Moorhead of Moor Insights and Strategy join “Squawk Alley” to discuss the reports that AMD is in talks to acquire Xilinx. Subscribe to CNBC PRO for access to investor and analyst insights on movie theaters and more: https://cnb.cx/2BT2E7y