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Is Mellanox up for sale?

Is Mellanox up for sale?

Deal is not imminent and may not take place while talks are still at an early stage

Credit: Reuters

Chipmaker Mellanox Technologies has hired a financial adviser to explore a sale after receiving takeover interest from at least two companies, CNBC reported citing people familiar with the matter.

The deal is not imminent and may not take place while talks are still at an early stage, according to the report.

Mellanox did not immediately respond to a request for comment.

Mellanox, which is based in Israel and the United States, makes chips and other hardware for data centre servers that power cloud computing. The company has a market capitalisation of about US$4 billion.

Activist investor Starboard Value, which took a stake of 10.7 per cent in the company last year, had raised concerns about Mellanox's rejection of a potential merger with Marvell Technology Group at the time.

It has been critical of the company's financial performance and has also called its 2018 financial targets "insufficient".

Mellanox, however, struck a settlement with Starboard in June to appoint new board members and name a director if the company failed to meet certain operating goals.

Since then, Starboard has cut its stake in the company to about 8.6 percent in July but still remains its largest shareholder.

Shares of the company were up about 15 per cent in after-market trading.

(Reporting by Arjun Panchadar in Bengaluru; Editing by Cynthia Osterman)


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