Qualcomm Set to Raise Bid for NXP to $44 billion
February 20 2018 - 6:20AM
Dow Jones News
By Ben Dummett
Chip giant Qualcomm Inc. is set to raise its bid for NXP
Semiconductors NV to about $44 billion in an effort to win
shareholder support for the acquisition, according to people
familiar with the matter.
San Diego-based Qualcomm is expected to raise its bid to about
$127.5 a share for rival chip maker NXP, up from its initial offer
of $110, or $39 billion, the people said. The higher offer could
come as soon as this week.
The higher offer 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 of for automobiles was
worth at least $135 a share. It cited NXP's better-than-expected
fourth-quarter earnings among other factors.
Qualcomm's expected higher bid also comes as it tries to fend
off a $121 billion takeover offer approach from Broadcom Ltd.
another big chip maker. The acquisition of NXP could help in this
effort as Broadcom has threatened to withdraw its offer for
Qualcomm if it makes a higher offer for NXP.
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.
Under the deal terms, first announced October 2016, Qualcomm at
a minimum needs support from NXP shareholders holding 80% of the
company's shares.
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.
In addition to shareholder support, Qualcomm is still seeking
approval from Chinese antitrust authorities.
Write to Ben Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
February 20, 2018 06:05 ET (11:05 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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