Qualcomm Raises Bid for NXP to $44 Billion -- Update
February 20 2018 - 7:39AM
Dow Jones News
By Ben Dummett
Chip giant Qualcomm Inc. raised its bid for NXP Semiconductors
NV to about $44 billion on Tuesday in an effort to win shareholder
support for the acquisition.
The move could also help Qualcomm as it tries to fend off a $121
billion takeover approach from Broadcom Ltd., which has threatened
to withdraw its offer if Qualcomm makes a higher offer for NXP.
San Diego-based Qualcomm increased its bid for rival chip maker
NXP to $127.50 a share, up from its initial offer of $110, or $39
billion.
The Wall Street Journal reported earlier Tuesday that Qualcomm
was set to sweeten its offer.
The move is meant to appease Elliott Management Corp. and
several other hedge funds that had argued the original bid was too
low. New York-based Elliott, which owns a 7.2% stake, had been
among the most vocal advocates for a higher price, arguing that
NXP, the world's largest developer of chips for automobiles, was
worth at least $135 a share. It cited NXP's better-than-expected
fourth-quarter earnings among other factors.
Elliott said Tuesday it had agreed to tender its shares in NXP
in response to the higher offer.
NXP, headquartered in the Netherlands but listed in New York,
last traded at $118.50 a share, a strong signal of investor
expectations of a higher offer. NXP shares rose 6.5% premarket
Tuesday.
Under the initial deal terms, first announced October 2016,
Qualcomm at a minimum needs support from NXP shareholders holding
80% of the company's shares. The updated offer lowers the minimum
tender condition to 70% of shares outstanding.
That threshold gave NXP shareholders considerable leverage to
block the deal, putting pressure on Qualcomm to raise its bid.
Qualcomm is expected to receive substantial support for the revised
offer, helping to ensure it can complete the acquisition, according
to the people familiar with the matter.
In addition to shareholder support, Qualcomm is still seeking
approval from Chinese antitrust authorities. It has already secured
competition approval in the U.S., the European Union, and other
jurisdictions.
Write to Ben Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
February 20, 2018 07:24 ET (12:24 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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