Qualcomm increases offer price for NXP to win more shareholder support
(Bloomberg) -- Qualcomm Inc. sweetened its bid for NXP Semiconductors NV by 16 percent from $110 a share to $127.50 a share, in an effort to shore up support from NXP shareholders to approve the deal.
The increased bid, with an equity value of about $43 billion, is a response to NXP investors who have called for a higher price. It also impacts Qualcomm’s own efforts to fight off a $121 billion acquisition attempt from rival Broadcom Ltd. that it’s said is too low.
Broadcom has said its bid for Qualcomm is contingent on the NXP deal going through at the previous price.
NXP shares rose as much as 6.3 percent $126.39 in pre-market trading. Qualcomm shares fell 2.9 percent to $62.83.
Qualcomm has also lowered the minimum threshold needed to win approval for the NXP deal to 70 percent, the company said in a statement Tuesday. It said the higher bid allowed it to reach binding agreements with nine investors who own 28 percent of NXP shares.
Qualcomm, the world’s largest maker of chips used inside mobile phones, said the deal for NXP has won approval from eight of nine required government regulatory bodies. Approval is still needed from China’s ministry of commerce. Qualcomm said it’s "optimistic" it will receive clearance in the "near term."
The increased bid is part an effort by Qualcomm’s management team to convince investors the company is better off as a standalone company rather than part of Broadcom. Qualcomm shareholders on March 6 will vote on a slate of Broadcom nominees to the board. That would give investors a chance to effectively approve a sale to Broadcom.