Why Would Altera Hold Out For $60?

In a report published Friday, FBR Capital Markets mentions that

would wait to receive a price of $60, since it seems to understand its strategic importance for

. In the report, FBR Capital Markets noted, "At future process nodes, perhaps as early as 7 nm, Intel may employ capital-intensive EUV technologies and/or 450 mm wafers to remain competitive. Therefore, Intel will become increasingly dependent on success in its foundry strategy to provide the wafer volumes needed to economically justify these investments." Although Altera cannot singlehandedly provide the needed volumes, it is Intel's foundry "proof of concept," and success that is needed to entice future foundry partners. Altera's Stratix 10 roadmap with Intel has been delayed to May, which holds the probable danger of Intel losing future Altera products. In order to solve this issue, Intel would need to acquire Altera. It is possible that Altera recognizes its "strategic importance" for Intel and could be "holding out for a higher price," the analysts said. Discussions seem to have been ongoing since at least October, when "Altera implemented change of control provisions for its management team," the analysts wrote, adding, "While we understand the strategic importance of the deal, we continue to favor a Broadcom acquisition as we believe it provides greater strategic benefits and higher potential foundry wafers for Intel."