What: Shares of U.S. based DRAM and NAND manufacturer Micron (NASDAQ:MU) jumped on Tuesday after the state-owned Chinese company Tsinghua Unigroup reportedly prepared a $23 billion buyout offer, according to the Wall Street Journal. By 11:30 AM, the stock was up 12%, just shy of $20 per share.

So what: The bid values Micron at $21 per share, well below the highest levels of the year. Micron began 2015 trading at $35 per share, and before the company's lackluster earnings report in June, the stock traded around $24 per share.

MU Chart

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If the deal were to go through, it would be the largest Chinese takeover of a U.S. company in history. Getting the deal through U.S. regulators is far from guaranteed, and the low offer price compared to the company's market capitalization just a few months ago could mean that higher bids, from either Tsinghua or possibly other suitors, could be in the cards.

Now what: It's unlikely that Micron agrees to sell at $21 per share. That price is just about 8 times the company's earnings in fiscal 2014, although the cyclical nature of the DRAM and NAND business means that the company's earnings often fluctuate wildly. An acceptable bid would likely need to be far higher, as Micron doesn't have much reason to sell unless the price is generous.

It's also unlikely that U.S. regulators allow such a large deal to occur, especially with the increasingly toxic relationship between the U.S. and China when it comes to cyber security. Allowing a state-owned Chinese company to take over a major American semiconductor manufacturer doesn't seem like a likely outcome.

While shares of Micron got a nice boost from the announcement of the offer, the likelihood of this deal going through is low, and the stock may lose these gains as that reality sets in.