AMERICAN CHIPMAKER Qualcomm has increased its offer for NXP Semiconductors to $44bn in a bid to rush the deal through.
The offer, up from an opening bid of $38bn, follows pressure from NXP shareholders, but also comes as Qualcomm is fending off its own unwelcome takeover bid from rival Broadcom. A Qualcomm acquisition of NXP would almost certainly make it too big for Broadcom to finance a takeover.
According to Reuters, Qualcomm has increased its offer to NXP shareholders from $110 per share to $127.50 following pressure from NXP shareholders who claimed that Qualcomm’s bid undervalued the company.
US hedge fund Elliott Management, which has a significant stake in NXP, has also been working with NXP’s shareholders and executives to extract a better deal from Qualcomm. The upped offer still remains below the $135 per share valuation pinned on the company by Elliott, but the hedge fund has nevertheless indicated that it will now support a buy-out.
The deal has been on the table for some time. Qualcomm originally tabled its offer in October 2016 but, despite receiving US regulatory approval in April 2017, Qualcomm has rushed to complete the deal, especially with NXP shareholders holding out for more.
If the new offer can push the deal over the line Qualcomm will be able to expand its presence further in the automotive, security and Internet of Things components markets.
Last month, Qualcomm chief financial officer George Davies said he wanted to close the deal but “not at all costs”, expressing reservations over NXP’s valuation.
The news comes as Broadcom continues to pressure Qualcomm into inking a takeover deal. While Broadcom’s bid assumes that Qualcomm’s bid for NXP will succeed, at the new valuation Broadcom could struggle to finance a takeover, let alone digest the company.
NXP, meanwhile, is the result of the March 2015 merger of Philips Semiconductors and Freescale, which was spun-out of Motorola in 2004. Freescale could trace its heritage back to the earliest days of semiconductors, having been founded in 1948. µ
Source : Inquirer