Shares of integrated-circuit developer Intersil Corp. (NASDAQ:ISIL) jumped on Wednesday, following a report from Reuters claiming that the company planned to announce a sale to Renesas Electronics (NASDAQOTH: RNECY) as soon as next week. The stock was up as much as 10.6% earlier in the day, settling to an 8% gain by 3:30 p.m. EDT.
Intersil's acquisition saga began last September, when U.S. company Maxim Integrated Products (NASDAQ:MXIM) was rumored to be interested in acquiring it. Consolidation in the semiconductor industry has been rampant in recent years, and an acquisition would have continued that trend.
Earlier this month, Japan's Renesas Electronics was reported to be in talks to acquire Intersil for as much as $3 billion, a fact that was later confirmed by Renesas itself. According to Reuters' sources, Intersil has now decided to accept the offer from Renesas, although it's still possible that Maxim could come in with a higher bid.
Intersil manufactures products that have military applications, making the process of selling itself to a foreign company more complicated. According to the Reuters sources, a long review by the Committee on Foreign Investment in the United States could slow down the acquisition process.
Acquisition rumors last year, and confirmed reports of Renesas' talks earlier this month, have sent shares of Intersil soaring. Year to date, the stock is up about 55%. A deal at this point looks fairly likely, although there's always the chance that the talks fall through. Investors will need to wait until next week to see how this story plays out.