(Reuters) - Microsemi Corp (O:MSCC) hiked its offer to buy PMC-Sierra Inc (O:PMCS) to about $2.33 billion, topping a $2.27 billion bid from Skyworks Solutions Inc (O:SWKS) and extending - but perhaps not ending - a bidding war that started almost two weeks ago.
Microsemi launched its latest offer less than five hours after Skyworks raised its bid, pushing PMC-Sierra's shares to a more-than nine-year high of $12.08 on Friday.
Microsemi's cash-and-stock offer was worth the equivalent of $11.88 per share, pipping Skyworks' cash offer of $11.60.
"From Skyworks' side we do believe that up to $12.50 still makes sense for them to do it, so I think there is still a little play left," D.A. Davidson & Co analyst Thomas Diffely said.
PMC-Sierra, based in Santa Clara, California, designs chip-making equipment used in cloud data centers and telecommunication infrastructure.
Aliso Viejo, California-based Microsemi, which also makes chip equipment and provides software for cloud data, has been trying to build up its communications business at a time of surging demand for data storage on the cloud.
Skyworks, a supplier to Apple Inc (O:AAPL), makes chips used in radio frequency and mobile communications systems, and the Woburn, Massachusetts company is trying to diversify beyond its dependence on chips for smartphones.
Microsemi had earlier offered to buy PMC-Sierra for $11.50 per share, while Skyworks had offered $10.50.
PMC-Sierra's shares were up 2.4 percent at $11.92 in early afternoon trading. Microsemi's shares were down 3.2 percent at $35.60, while Skyworks' were up 3 percent at $76.85.
Up to Thursday's close, PMC-Sierra's shares had risen more than 50 percent since Oct. 5, when Skyworks made its first bid. Skyworks shares have fallen about 9 percent in that period.
Microsemi shares have fallen about 1.55 percent since its initial offer on Oct. 19.