Qualcomm Raises Bid for NXP to $44 Billion -- Update

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 [e-mail]

(END) Dow Jones Newswires

February 20, 2018 07:24 ET (12:24 GMT)

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