What: Shares of Linear Technology (NASDAQ:LLTC) surged on Tuesday following a report by Bloomberg claiming that Analog Devices (NASDAQ:ADI) was in advanced talks to buy the company.
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The deal, which remains subject to stockholder approval, would bring together two analog semiconductor powerhouses and would be the latest in a string of blockbuster semiconductor deals over the past few years.
Also on Tuesday, ADI said it was raising guidance for its July quarter to $865 million in revenue from a previous range of $800 million to $840 million, with adjusted earnings on a per-share basis between 77 cents and 78 cents, up from an earlier estimate of 74 cents. Linear Technology Corporation makes up approx 0.10% of Integrated Investment Consultants’s portfolio.
Analog Devices products are used in mobile phones and cars, among other end markets.
The semiconductor industry has been in the midst of an unprecedented wave of consolidation for more than two years.
Now what: The spike in Linear shares due to this merger rumor has pushed the stock up to its highest level since the peak of the dot-com boom. Avago Technologies Ltd. acquiring rival Broadcom Corp. for $37 billion is one such deal. The investment management company now holds a total of 1,384,200 shares of Linear Technology Corporation which is valued at $66,870,702 after selling 49,700 shares in Linear Technology Corporation, the firm said in a disclosure report filed with the SEC on Jul 20, 2016. “By combining our complementary areas of technology strength, we have an excellent opportunity to reinforce our leadership across the analog and power semiconductor markets, enhancing shareholder value”. “That expands Analog Devices’ library of standard products components”, he added.
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The transaction has been approved by the boards of both companies and is expected to close in mid-2017.
