Dialog Semiconductor Rises on Synaptics Talks in Apple Shift

(Bloomberg) -- Dialog Semiconductor Plc rose after the technology company said it’s proceeding with an attempted takeover of Synaptics Inc., helping it take a step forward in its effort to reduce its reliance on sales to Apple Inc.

Dialog is conducting due diligence and detailed discussions related to the potential deal, it said late Tuesday in a statement. The comments confirmed a report by Bloomberg News that the two were exploring a transaction. Dialog gained as much as 3.7 percent and was trading 2.7 percent higher at 15.40 euros as of 9:27 a.m. in Frankfurt, giving the Reading, England-based company a market value of 1.2 billion euros ($1.4 billion).

“Dialog Semiconductor is seeking to lower its dependency on Apple,” Harald Schnitzer, an analyst at DZ Bank AG, said in a note to clients. “Therefore an acquisition could make sense, depending on the purchase price.”

Apple, Dialog’s biggest customer, has slashed orders for the company’s power-management chips used in the iPhone. That led the Reading, U.K.-based company to warn revenue will fall 5 percent in 2018.

Synaptics, with a market value of $1.7 billion, would help Dialog expand its product portfolio by adding sensors, touch screens and touch pads, which it sells to Apple, Samsung Electronics Co. and other smartphone makers, according to data compiled by Bloomberg.

Any deal would be paid for primarily in cash from the company’s balance sheet as well as debt, Dialog said. Shares in Synaptics, which is based in San Jose, California, were halted in extended trading on Tuesday.

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