Xilinx Soars on Buyout Hopes

Xilinx Inc. shares are on the move Thursday--fully erasing January's 8.2% decline--following the chip maker's fiscal third-quarter report. But the results, solid as they were, aren't the reason.

Instead, it's buyout hopes, which have been a major semiconductor catalyst over the past several years.

The company disclosed in a regulatory filing made along with the company's quarterly results that it has entered into change-of-control agreements with five senior executives, including Chief Executive Moshe Gavrielov. They detail what the officials would be in line for in case of a deal.

During the company's quarterly conference call late Wednesday, Mr. Gavrielov noted that "there's very clearly massive consolidation" in the chip sector "and the general expectation is that that will continue." He added that the contract moves merely put Xilinx's pay practices "in line with those...common for public companies"--both in his industry and elsewhere.

SunTrust analysts say the development should "drive renewed takeout speculation and a full valuation." Meanwhile, Pacific Crest says potential buyers include Avago Technologies Ltd. and Qualcomm Inc.

A buyout would be welcome for investors which have seen Xilinx go sideways since mid-2013 after more than triple following the financial-crisis bottom below $15.

Shares were recently up more than 10% to $47.57, making it the eighth best performer in the S&P 500 for the day.

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(END) Dow Jones Newswires

January 21, 2016 14:55 ET (19:55 GMT)

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