Micron Technology Inc., the largest U.S. largest memory chipmaker, rose as much as 9% after the company took steps to make a takeover more difficult, sparking speculation that the company is a target.
Micron’s board of directors adopted a “poison pill,” a rights issue that would be triggered if an individual or group acquires 4.99% or more of the company’s outstanding stock. It’s designed to deter unwanted buyout overtures and allow the company to retain tax benefits related to prior losses, Micron said Monday in a regulatory filing.
The move rekindled speculation that the company may attract bidders. An acquirer from China or Intel Corp., which has a joint venture with Micron, would be the most likely buyers, analysts said. An offer from either wouldn’t be straightforward and is unlikely to happen any time soon, according to Cowen & Co. analyst Timothy Arcuri.
Micron stock rose 6.6% to $14 at 2 p.m. in New York trading, helping to offset a loss of 7.3% this year through Friday.
In July of last year, Bloomberg reported that the investment arm of one of China’s top universities was planning to offer $23 billion for Micron, according to a person familiar with the matter. Micron said that the time that it hadn’t received such an offer. Micron’s current market value is about $14.5 billion.
According to Cowen’s Arcuri, an acquisition by China would be unlikely to get approval from U.S. regulators. Intel, which has increasing ambitions in memory chips, would see little benefit from spending to buy Micron when it’s already getting what it needs from the joint venture, he wrote in a note to clients.