Qualcomm Raises Bid
U.S. chipmaker Qualcomm Inc raised its offer to buy NXP Semiconductors NV to $127.50 per share from $110, after being pressured by shareholders led by activist hedge fund Elliott Management Corp, the Wall Street Journal reported, citing people familiar with the matter. The raised offer valued NXP at $44 billion, and the higher offer could come as soon as this week, the paper reported.
The $127.50-a-share price for NXP, announced Tuesday, is the latest twist in months of maneuvering between Qualcomm and Broadcom for an advantage in what would be the largest tech deal ever. Broadcom Chief Executive Hock Tan had stressed his offer for Qualcomm—a deal that would forge the third-biggest chip maker by revenue—depended on his target not raising its price for NXP beyond the original $110 a share. But as a higher price for NXP seemed increasingly inevitable, Mr. Tan recently softened his position, saying he would keep his options open.
Now the two rivals are headed toward a March 6 showdown in which Qualcomm shareholders are scheduled to vote on a slate of directors nominated by Broadcom. In another recent concession seemingly aimed at getting a deal done, Mr. Tan reduced his number of candidates from 11 to six, seeking a majority rather than trying to unseat the entire Qualcomm board.
“Qualcomm’s board of directors and management have transferred $4.10 per Qualcomm share from Qualcomm stockholders to NXP stockholders, representing approximately $6.2 billion of value,” Broadcom said in a statement Tuesday. “This revised price for NXP is well beyond what Qualcomm has repeatedly characterized as a ‘full and fair’ price.”
The higher offer also bucks a recommendation from ISS, which said in its report last week that Qualcomm could negotiate provisions with Broadcom to close the NXP deal at a mutually agreed-upon price. ISS recommended Qualcomm shareholders should nominate four of Broadcom’s six recommended new directors to help facilitate discussions between the two companies on a higher takeout price for Qualcomm. Broadcom has already said its current offer is “best and final.”