NEW YORK (TheStreet) -- Intel (INTC) shares are up 1.94% to $34.67 on heavy volume in early market trading on Friday on reports that the digital technology manufacturer is closing in on a deal to purchase semiconductor manufacturer Altera (ALTR) for approximately $15 billion, according to the New York Post.
The deal could be worth $54 per share, a 15% premium over Altera's previous closing price of $46.97, the New York Post added.
The standstill agreement the company signed with Altera earlier this year promising not to launch a hostile takeover bid expires on June 1.
Altera rejected a previous $54 per share bid from Intel in April, according to Reuters.
The potential deal would represent the second multi-billion consolidation of the chip making industry in recent days.
Separately, TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate INTEL CORP (INTC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- INTC's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- INTC's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, INTEL CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.05% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full analysis from the report here: INTC Ratings Report