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Cable/Video

Intel Outside

4:45 PM -- It didn’t take long for the legal eagles to start circling Zoran Corp. (Nasdaq: ZRAN)'s deal to buy Microtune Inc. (Nasdaq: TUNE), with at least three law firms starting probes about whether the price Zoran is paying ($2.92 per share in cash) is fair, or if Microtune failed to adequately shop the company. (See Zoran Targets Broadcom With Microtune Buy .)

Before Zoran jumped in, it appeared logical that Intel Corp. (Nasdaq: INTC), which has been dipping into an M&A warchest recently, offered the best match for Microtune. Intel, it followed, could then integrate Microtune's silicon tuners with the cable modem chipset technology it is acquiring from Texas Instruments Inc. (NYSE: TXN)'s cable modem business, and keep the pressure on Broadcom Corp. (Nasdaq: BRCM) as MSOs start to develop advanced video gateway strategies. (See Intel Snares TI's Cable Modem Business and What's Intel's Next Move?)

An Intel-Microtune hook-up seemed even more rational given that TI and Microtune have an extensive partnership history that has prevented Broadcom from running off with the market, never to be caught.

Intel can still get what it appears to need by snapping up MaxLinear Corp. or Entropic Communications Inc. (Nasdaq: ENTR), though it would have to dig deeper into its pockets to pull it off -- if either of those two were even on the block. At last check, MaxLinear's market cap was at $349.45 million, $619.72 million for Entropic, and $160 million for Microtune.

I don’t know for sure if Microtune sought bids from any other parties, but we've asked the company to address the question.

But the way Microtune's stock is moving today, it could force Zoran to sweeten its offer or perhaps cause Intel or someone else to swoop in and make a play, maybe giving us a replay of the fight Arris Group Inc. (Nasdaq: ARRS) and Ericsson AB (Nasdaq: ERIC) waged over Tandberg Television more than three years ago. (See Tandberg Board Backs Ericsson Bid and Ericsson Offers $1.4B for Tandberg TV.)

In late trading Wednesday, Microtune shares were $2.94, up 47 cents (19.3%), for the day, putting it within spitting distance of its 52-week high of $3.05.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 4:24:19 PM
re: Intel Outside

Still haven't heard if TUNE sought bids from others than  Zoran, but I should mention that Microtune president and CEO James Fontaine did acknowledge in the original announcement that his company "actively explored a broad range of strategic avenues during the last several months to enhance shareholder value" before going with Zoran.


Not sure if that range included bids from Intel or others. We'll try to fill in  some of those blanks as soon as we can. JB




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