What happened
Shares of MagnaChip Semiconductor (MX 0.41%) were skyrocketing this morning on a report that LX Group is looking to acquire the company, according to the Korea Economic Daily website.
The tech stock was up by 17.6% as of 11:17 a.m. ET on Tuesday.
So what
According to the news report, LX Group, a South Korean company, will make a formal bid to acquire MagnaChip as early as next week, though the details of the potential deal haven't been disclosed.
Image source: Getty Images.
LX Group wants to buy the company in order to create synergies between its semiconductor company, LX Semicon, and MagnaChip. The latter company is a leader in display driver integrated circuits (DDIC), with 30% market share.
MagnaChip has been looking for a buyer ever since a deal with a private Chinese equity firm fell through back in December. Rising tensions between the U.S. and China might have led to the deal being blocked, as U.S. officials were concerned about national security issues, according to the Korea Economic Daily.
Now what
Nothing official about the potential deal has been disclosed by LX Group or MagnaChip Semiconductor, so investors might want to temper some of their expectations. If a deal is disclosed soon, it will also have to be approved before anything is finalized.
But it's clear that investors are hoping such a deal does happen, and with the company's share price down 31% over the past 12 months -- even with today's massive price jump -- it's not surprising that investors are looking for some good news.
