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Feb 1 (Reuters) - Transmeta Corp TMTA.O said it received a letter of interest from key shareholder Riley Investment Management LLC seeking to buy the chip designer for $15.50 a share in cash.
The loss-making company said its board will carefully consider and evaluate Riley Investment's offer in due course.
Riley Investment, which owns a 6.6 percent stake in Transmeta, had demanded a change in the company's board last December and expressed concern about the company's strategy following a favorable settlement of a patent litigation with Intel Corp (INTC.O).
Transmeta is best known for its Crusoe and Efficeon computer microprocessors launched in 2000, when it strived to be a chipmaker, before pulling out of the microprocessor business under heavy pressure from Intel in 2005.
Last July, Advanced Micro Devices Inc AMD.N also bought a stake in Transmeta, which now focuses solely on developing semiconductor technologies for other companies.
Shares of Transmeta were up more than 4 percent to $14.05 in trading before the bell, after closing at $13.46 Thursday on the Nasdaq. (Reporting by Aditi Samajpati in Bangalore; Editing by Jarshad Kakkrakandy)