Elliott Believes Qualcomm Can Deliver Value to its Shareholders at Prices for NXP Higher than $135 Per Share
January 19 2018 - 8:00AM
Business Wire
Releases detailed UBS Financial Analysis laying
out supporting financial data
The Report and Elliott’s Shareholder Letter can
be viewed at dedicated website: www.FairValueForNXP.com
Elliott Advisors (UK) Limited (“Elliott”), which advises funds
which now collectively hold an increased economic interest in NXP
Semiconductors N.V. (NASDAQ:NXPI) (“NXP”) of approximately 6.6%,
today released a letter to NXP shareholders. In conjunction with
that letter, Elliott has made available a new presentation which
was prepared by UBS Investment Bank (“UBS”) for Elliott — the “UBS
Financial Analysis”.
The new materials make the case that NXP is of significant
strategic importance to QUALCOMM Incorporated (“Qualcomm”) and that
such a transaction will deliver substantial value to Qualcomm
shareholders at prices meaningfully higher than Elliott’s own
assessment of standalone intrinsic value of $135 per share.
In summary, Elliott’s letter sets out the following points:
- Qualcomm’s shareholders would benefit
from a transaction which delivers material diversification away
from its declining licensing business and provides meaningful
strategic and financial synergies. In Elliott’s view, an
acquisition of NXP brings more dollars of strategically relevant
diversification in high-growth segments of the semiconductor market
to Qualcomm than any other company. Elliott also notes that these
benefits would not be available to Qualcomm through other means of
capital allocation such as a buyback;
- The synergies from the acquisition of
NXP by Qualcomm alone could create between $19 and $48 of value per
NXP share. NXP shareholders would be uniquely disadvantaged if a
transaction occurred and these synergies were not appropriately and
fairly shared. The average takeover premium paid on semiconductor
and large cap deals during the last seven years was, based on one
recent estimate, approximately 37%; and
- The UBS Financial Analysis shows that
Qualcomm shareholders could benefit from a share price increase
from unaffected levels, as a result of an NXP acquisition, in
excess of 30% at prices meaningfully higher than Elliott’s view of
NXP’s standalone value of $135 per share.
“We believe both Qualcomm and NXP shareholders stand to benefit
from a credible offer for NXP — an offer which appropriately and
fairly recognizes both NXP’s intrinsic value, the substantial value
that will be delivered to Qualcomm and a control premium for NXP
shareholders,” Elliott said in its letter to shareholders. “Even if
one’s view of NXP’s intrinsic stand-alone fair value is below
Elliott’s own estimate of $135 per share, we believe the analysis
supports the finding that Qualcomm can deliver value to its
shareholders at prices for NXP higher than $135 per share. Our
increasing economic interest in NXP which has current market value
of approximately $2.7 billion underscores our significant level of
conviction in the value opportunity present at NXP today.”
About Elliott
Founded in 1977, Elliott Management Corporation is one of the
oldest private investment firms of its kind under continuous
management. The firm’s investors include pension funds, private
endowments, charitable foundations, family offices, and employees
of the firm. Elliott Advisors (UK) Limited is an affiliate of
Elliott Management Corporation.
Our approach to NXP is consistent with our approach to many of
our current and previous investments. We have invested a
significant amount of time and resources into understanding NXP,
including hiring numerous advisors and consultants with whom we
have worked together to receive input from over 50 industry
participants. We believe strongly in the value conclusions that we
have drawn as a result of this effort.
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version on businesswire.com: http://www.businesswire.com/news/home/20180119005315/en/
Elliott Advisors (UK) LimitedSarah Rajani CFA, +44 (0) 20 3009
1475srajani@elliottadvisors.co.ukElliott Management
CorporationStephen Spruiell, +1 212-478 2017sspruiell@elliottmgmt.comInformation Agent:Okapi
Partners LLCPat McHugh, +1 212-297-0720info@okapipartners.com
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