Exclusive: Hedge fund Third Point urges Intel to explore deal options

(Reuters) – Activist hedge fund Third Point LLC is pushing Intel Corp to explore strategic alternatives, including whether it should keep chip design and production under one roof, according to a letter it sent to the company’s chairman on Tuesday that was reviewed by Reuters.

Were it to gain traction, Third Point’s push for changes could lead to a major shakeup at Intel, which has been slow to respond to investor calls to outsource more of its manufacturing capacity. It could also lead to the unwinding of some of its acquisitions, such as the $16.7 billion purchase of programmable chip maker Altera in 2015.

Third Point Chief Executive Daniel Loeb wrote to Intel Chairman Omar Ishrak calling for immediate action to boost the company’s position as a major provider of processor chips for PCs and data centers. The New York-based fund has amassed a nearly $1 billion stake in Intel, according to people familiar with the matter.

Intel shares rose 6.1% to $49.95, the most in more than eight months on the news, giving the company a market value of more than $200 billion. The stock had declined about 21% this year, compared with a 43% rise in the Nasdaq Composite Index

Intel’s most urgent task was addressing its “human capital management issue,” as many of its talented chip designers have fled, “demoralized by the status quo,” Loeb wrote in the letter. Reuters News.

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