Jan. 18 (Bloomberg) -- PMC-Sierra Inc. rose the most in more than 2 1/2 years after Ralph Whitworth’s Relational Investors LLC increased its stake and said it may push for “strategic alternatives” aimed at lifting the stock price.
Shares of Santa Clara, California-based PMC-Sierra, which makes chips for computer networking and data-storage equipment, gained 10 percent to $6.41 at the close, the biggest increase since April 24, 2009. The stock fell 36 percent last year.
While PMC-Sierra has attracted new customers with chip designs, it’s been slow to convert the business into sales, Relational Investors said in a regulatory filing. The firm said PMC-Sierra’s board may need to consider “broader strategic alternatives.” Those options include reducing PMC-Sierra’s business lines or combining with other companies.
Relational Investors, based in San Diego, boosted its ownership to 16,495,777 shares, or 7.2 percent of outstanding stock. The move makes Relational Investors the third-biggest holder of PMC-Sierra stock, according to data compiled by Bloomberg.
PMC-Sierra’s 2011 sales rose 4 percent to $659.2 million, according to analysts’ estimates compiled by Bloomberg. That pace would be down from 28 percent the previous year. The company is scheduled to report fourth-quarter results on Feb. 6.
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