US chipmaker Freescale has agreed to be bought by a private equity team led by Blackstone for $17.6bn (£9.35bn).
The deal would one be one of the biggest-ever leveraged buyouts of a technology company.
However Austin, Texas, based Freescale, has a clause allowing it to seek other offers in the next 50 days.
Freescale, once part of Motorola, is the world's largest supplier of chips for the global automobile industry, and also makes cellphone chips.
'Fair price'
The firm, which has been in the semiconductor business for 56-years, said its board had unanimously approved the proposed acquisition offer.
The bidding consortium, which has offered $40 a share, also includes Carlyle Group, Permira Funds and Texas Pacific Group, as well as Blackstone.
Freescale shares were up 5.8% to $39.44 in after-hours trading on the New York stock exchange on Friday.
"This is a fair price to pay, however we can't discount a counter bid," said Hapoalim analyst Nimal Vallipuram.
Reports in the US have said that other investment groups, including one headed by Kohlberg Kravis Roberts, might be interested in Freescale.
If the company decides to accept a counter offer, it must pay a termination fee to the Blackstone consortium of either $150m or $300m depending on the timing.
New microchip
The firm's fast-expanding division is its wireless and mobile systems group, which competes with rivals such as Texas Instruments and Qualcomm.
However in July Freescale also unveiled a microchip which can store information like a hard drive.
The chip, called magnetoresistive random-access memory (Mram), maintains data by relying on magnetic properties rather than an electrical charge.
At the time one analyst said the chip was the most significant development in computer memory for a decade.
Freescale, which has 24,000 employees worldwide, had 2005 revenue of $5.84bn and a profit of $584m.
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