If there is ever a position to be in, then this is it.

I like to imagine what it would be like.

The phone rings and my assistant tells me another CEO is on the phone. He gets right to the point. He wants to buy my company. He offers a price that represents a significant premium — enough to make me rich.

And I turn him down flat.

He calls back.

The conversation repeats. And again I decline.

But this CEO is unusual. How he knows what I know is tough to discern, but he’s clearly seen the value of my company, and its potential.

As (an imaginary CEO) I’ve been around the block a time or two. I know he won’t call back. But I also know I haven’t heard the last of him.

The next time he’s going to pick up the phone, he’s going to unleash a hostile offer.

He’s going to make the case directly to the shareholders, to try to buy the company from the floor of the stock exchange rather than the board room. He’ll tell them I turned him down. He’ll say it’s a fair offer. And then he will sweeten the pot. Part of it will stem from the fact that he thought his first offer was fair. Part will be he sees the potential. The rest will be ego — he’ll want to close a deal just to close a deal.

In any case, it won’t matter. The company likely will be sold, and this little dance will ensure a favorable price.

OK, back to reality. I might not be a CEO, but I’ve seen this scenario unfold time and time again, at big companies and small.

And it’s happening to a company I recommended. I’m a little disappointed when this happens. I mean, it’s nice to get a vote of confidence and have another company come in with its checkbook and deliver a 50% gain in less than three months, which is what has happened, so far, with the company I recommended. But I’d rather see the company do what I predicted it could: Use its technology to change an industry and perhaps deliver even greater returns over the long haul.

The company I recommended was Zarlink (OTC: ZARLF).

“Zarlink makes computer chips, but it is also a critically important health-care company. You see, 80 million Americans, including myself, have high blood pressure. Zarlink’s Medical Implant Communications Service, a wireless radio technology, is part of the world’s first implanted device to treat hypertension and heart failure. Zarlink chips are extremely low-power, and it’s the industry’s only provider of standards-compliant radio chips for the healthcare market. It’s where companies like CVRx (a venture-stage group in Minneapolis that developed the blood-pressure system) must turn as they create innovative new wireless products. All of these products will need chips, and Zarlink is the go-to supplier. It’s a $300 million company that has already shipped more than a billion chips.”

This was all perfectly true when I wrote it in May. The only significant update is the company is now worth at least $550 million, which is what a company called Microsemi Corp. (Nasdaq: MSCC) has offered.

Microsemi, which has pulled off two recent successful acquisitions and evidently has solid financial backing, is taking its Zarlink offer straight to shareholders after management spurned two previous offers. Microsemi is willing to open its checkbook to buy some expansion in the communications and health care markets. Offer No. 1 was turned down. Offer No. 2 — which was $0.30 a share higher — was also turned down. Without discussion. (Nice touch, huh? Good rule: Always stick it to ’em before you take their money.)

Zarlink looks like a perfect fit for Microsemi’s purposes. Most of its revenue is from communication chips, which help telecom and cable companies deliver bundled voice, video, data and mobile services, according to Reuters. A little less than a fifth of its top line comes from the medical chips — for everyday devices like pacemakers as well as the niftier breakthrough stuff in development — though that’s likely where the growth lies.

This is a deal I fully expect to get done. Micrsosemi is looking for growth, it clearly has a plan to achieve it and it has the cash and most importantly the credit to carry out the deal, which will, the company says, have an immediate impact on earnings.

Action to Take–> For conservative investors, the best advice is to sell now. The short-term rise from $2.44 when I recommended the shares, to the current market price of roughly $3.75, is a good run. No one ever went broke taking a profit, and that’s a pretty good one. On the other hand, investors might want to consider the fact that another round of offers appears likely, and there may be additional upside. There may well be significant additional upside.

More sophisticated investors sitting on these shares might want to sell half their position to protect gains and hang onto the rest, with a sell-stop at a certain point to protect any gains. More aggressive investors convinced of Zarlink’s potential might want to add some shares immediately and hang on for any upswing that stems from an increased offer.

[Note: And, finally, investors of all styles ought to investigate my premium newsletter, Game-Changing Stocks, where I first recommended  this stock. It delivers high-octane ideas like Zarlink to your inbox twice a month. Go here to find out more…]