Photographer: Brent Lewin/Bloomberg

Elliott Takes Stake in ‘Undervalued’ NXP as Qualcomm Deal Stalls

Updated on
  • Activist investor says Qualcomm’s $47 billion offer is too low
  • Deal has been held up by European Union antitrust probe

Activist investor Paul Singer thinks the biggest M&A deal in the history of the semiconductor industry isn’t big enough.

Singer’s Elliott Management Corp. amassed a 6 percent stake in NXP Semiconductors NV and wants a better price for the Dutch chipmaker, which is being bought by Qualcomm Inc. for $47 billion.

NXP shares are “significantly undervalued,” Elliott said in a regulatory filing Friday. The activist hedge fund firm wants NXP to renegotiate with Qualcomm, find a better offer from another buyer or remain a standalone company, according to a person familiar with its thinking. New York-based Elliott believes all three options offer better value, said the person, who asked not to be identified because the matter is private. NXP and Qualcomm declined to comment.

Qualcomm’s agreement last October to buy NXP has been held up by European antitrust regulators asking for more information on the deal. Elliott is one of at least three large NXP shareholders agitating for a higher price than the $110-a-share offer from Qualcomm, people familiar with the process said in May. NXP rose as much as 1.9 percent to $112.79 in New York, the highest intraday price since June 2015.

NXP’s board has already approved Qualcomm’s offer, however the deal is structured as a tender offer that requires 80 percent of shareholders to approve the transaction before it can proceed. Qualcomm has extended the offer several times, and fewer and fewer shareholders have tendered their shares. As of the last offer in late July, only 7.6 percent of outstanding NXP common shares had been tendered.

Elliott believes there are other potential buyers for the company, the person said.

Elliott’s stake includes 4.9 percent of the common shares and an additional 1.1 percent derivatives investment, according to the filing.

— With assistance by Ellen Proper

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE