Altera (ALTR) Investors Remain Positive Amid Rejected Intel (INTC) Deal, But Management Now on Hot Seat

Altera Corp. (Nasdaq: ALTR) is trading positive early Friday following news that Intel (Nasdaq: INTC) may have put the kibosh on a takeover deal. The action indicates that investors may not be so convinced that the deal is truly done.

Bloomberg noted that Altera rose 5.2 percent Thursday amid reports that Altera rejected a $54 per share bid from Intel.

While Intel might be contemplating a higher offer, at $54 per share, Altera is valued at 23 times EBITDA. Bloomberg data indicate that that wold be the largest multiple paid in similar deals over the last five years.

Altera could come under attack from activist investors if its management isn't able to form a deal or make good on plans to accelerate growth. The company is on track for a 3 percent increase in sales this year, which is better than the decline suffered in 2014, but is slower than what is projected for many segment peers.

Trading around $43.35, Altera is about 20 percent below Intel's initial bid. Investors will look for commentary in the coming weeks and months from Altera management on how it plans to boost share value at least over $50.

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