Intersil's Stock Could Soar a Lot More If Renesas Buyout Goes Through

By Markets MarketWatch Pulse

Intersil Corp.'s stock rocketed 20% to a nine-year high on heavy volume, but analysts say they believe it can rally a lot further, if they did their math right. Volume of 6.4 million shares was more than seven times the full-day average. The Wall Street Journal reported that Japan's Renesas Electronics Corp. was in talks to buy the chip maker in a deal that would be valued at about $3 billion. Deutsche Bank analyst Ross Seymore said he had "no incremental knowledge" about a potential deal, but he would not be surprised since he had written about the possibility "many times in the past." He the terms of the buyout, originally reported by Nikkei, would imply a bid of about $21 a share, which implies a further surge of 12% from current levels. Analyst Craig Ellis at B. Riley said the per-share bid could be $22, which is 17% above current levels. Stifel Nicolaus analyst Tore Svanberg said the bid could be in the range of $20 to $23 a share, or 6.8% to 23% above current levels. The stock has now run up 47% year to date, while the PHLX Semiconductor Index has climbed 20% and the S&P 500 index has gained 6.7%.

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