(Reuters) - Israeli chip designer Mellanox Technologies Ltd has given its acquisition target EZchip Semiconductor Ltd, a network communications chip maker, 30 days to seek a higher offer.
Mellanox had agreed in September to buy EZchip for $811 million with the aim of expanding its product portfolio for high-performance computing.
The global semiconductor industry has seen a wave of consolidation as companies look to meet demand for cheaper chips and to diversify their portfolios.
EZchip said on Tuesday the two companies had amended their merger agreement to give EZchip until Dec. 16, to solicit alternative offers.
However, before EZchip accepts a higher proposal, Mellanox will have the right to match that offer, but has agreed to waive its right to a termination fee should EZchip accepted a rival offer.
Reuters reported on Sunday that Mellanox and EZchip would include the so-called "go-shop" provision in the agreement, seeking to address concerns from EZchip investor Raging Capital Management.
The activist investor, which has a 6.7 percent stake in EZchip, is pushing for a higher price than Mellanox's offer.
EZchip has said that its financial adviser Barclays had approached six buyers, all of whom were not interested.
(Reporting by Devika Krishna Kumar in Bengaluru; Editing by Savio D'Souza)