Bloomberg reports that people familiar with the matter revealed that Silver Lake Management is in exclusive negotiations to acquire a majority stake in Intel's programmable chip unit. The private equity firm is working out details of an investment in Altera, whose multi-purpose chips are mainly deployed in telecommunications networks, according to people familiar with the matter.
While discussions are at an advanced stage, the exact size of the stake has not yet been determined, these people said. They said there was still a chance that talks would be delayed or broken down and asked that their identities not be revealed while discussing confidential information. Spokespeople for Intel and Silver Lake declined to comment.
On Tuesday, Intel shares rose as much as 17%, the largest intraday gain in nearly five years. Earlier in the day, speculation that Intel could be broken up in a deal involving Taiwan Semiconductor Manufacturing Co. pushed Intel shares higher.
Santa Clara, Calif.-based Intel agreed in 2015 to pay about $17 billion to acquire Altera.
Intel said last year it would seek to sell a stake in Altera as part of a broader plan by the chipmaker to turn around its business. Bloomberg News reported in November that Altera was attracting interest from Lattice Semiconductor and a number of buyout firms. People familiar with the matter have previously said that some acquirers have valued Altera as low as $9 billion.
Intel was once the dominant player in the chip industry, but in recent years it has lost market share to competitors and missed the opportunity to transform into an artificial intelligence accelerator. Intel's board of directors ousted CEO Pat Gelsinger last year as his comeback plan has been slow to progress, and the company has been searching for a new leader.