What happened

Shares of Synaptics Inc. (NASDAQ:SYNA) surged on Wednesday after the company confirmed that it was talking with Dialog Semiconductor (NASDAQOTH:DLGNF) about a potential acquisition. Synaptics stock was up about 12.1% at noon EDT.

So what

Bloomberg reported on June 8 that Synaptics was discussing selling itself to Dialog. On the same day, CNBC reported that Dialog had made a bid of $59 per share, which was rejected by Synaptics. Synaptics declined to comment at that time.

A rising stock chart.

Image source: Getty Images.

With Synaptics now confirming that talks are ongoing, it would seem the odds of a deal being signed have increased. The price would likely be higher than the original $59 bid, and an analyst at KeyBanc sees a price as high as $70 per share as possible. Over the past 52 weeks, Synaptics stock has traded between $33.73 and $61.18 per share. Following Wednesday's rally, it sits just shy of $55.

Synaptics doesn't plan to make any additional comments about the talks, and the company said that "there is no assurance that a transaction will result from these discussions."

Now what

Synaptics stock has been hammered over the past few years, falling from a multiyear high of around $100 in late 2015 to below $40 in late 2017. The company has struggled to grow revenue and earnings, reporting an 11% year-over-year revenue decline in its fiscal third quarter, along with a steep drop in adjusted net income. Sluggish demand for smartphones is taking a toll on demand for the company's touchscreen, display driver, and fingerprint products.

SYNA Chart

SYNA data by YCharts.

With Synaptics stock still below the reported rejected offer price of $59 per share, the market doesn't seem all that optimistic that a deal will get done.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.