NXP/Qualcomm deal is major premise of recent “best and final” offer from Broadcom

The Qualcomm subsidiary working to acquire NXP extended to Feb. 23 the cash tender offer period afforded NXP shareholders looking to agree to sell their stock in the Dutch semiconductor firm for $110 per share. The nearly $40 million acquisition, initially proposed in October 2016, has passed regulatory scrutiny in the European Union and Korea, but not in China. Another hold-up comes in the form of activist NXP shareholders resistant for the deal and are asking for a higher price.

Broadcom’s “best and final” offer for Qualcomm comes with conditions related to the NXP acquisition. Specifically, Broadcom says it’s offer of $120 billion for Qualcomm “is premised on either Qualcomm acquiring NXP Semiconductors…on the currently disclosed terms of $110 per NXP share or the transaction being terminated…”

Qualcomm says only 1.5% of  NXP common share “have been validly tendered pursuant to the tender offer and not properly withdrawn.” Despite the resistance from NXP shareholders, Qualcomm said in a statement, “The transaction is expected to close in early 2018.”

Although Qualcomm’s Board of Directors unanimously rejected Broadcom’s revised acquisition proposal, Chairman of the Board Paul Jacobs, in a message to Broadcom CEO Hock Tan, said he’s open to a meeting. According to Tan, that meeting is set for Tuesday; he did take the opportunity to say he was “astonished” Qualcomm wouldn’t meet as early as today or over the coming weekend. “We hope that your willingness to meet with us reflects Qualcomm’s genuine intent to reach an agreement…After having met with most of your largest stockholders this past week, we have no doubt that this is their strong desire as well.”

Related to the regulatory piece of the potential acquisition, Broadcom offered up concessions including an $8 billion “regulatory reverse termination fee” and a “ticking fee” of 6% per year.


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