Qualcomm Raising Offer for NXP Semiconductors

Broadcom Limited issued the following statement regarding Qualcomm Incorporated‘s decision to raise its offer price for NXP Semiconductors, N.V. to $127.50 per share:

By raising its offer for NXP from $110 per NXP share to $127.50 per NXP share, 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. This revised price for NXP is well beyond what Qualcomm has repeatedly characterized as a ‘full and fair’ price.

We believe any responsible board would have seriously engaged with Broadcom regarding Broadcom’s value-maximizing offer and the terms of the NXP acquisition, particularly in light of the recent recommendations from ISS and Glass Lewis. Broadcom believes the price increase demonstrates the Qualcomm board’s disregard for its fiduciary duty to maximize value for Qualcomm stockholders.                                                   
In light of Qualcomm’s decision to transfer value from its own stockholders to NXP stockholders, Broadcom is evaluating its options.

In its February 16, 2018 report, Institutional Shareholder Services stated: “Through negotiations, Qualcomm might be able to obtain a more realistic understanding of what Tan and Broadcom think NXP is worth (the deal will doubtfully get done at $110, since NXP continues to trade around $117) – a calculation that is equally critical to the Qualcomm board, which does not want to be perceived by shareholders as overpaying for NXP, making it seem like an imprudent defensive acquisition.”

In its February 20, 2018 report, Glass Lewis & Co. stated: “Notably, any increase in the offer price [for NXP] would be to the detriment of Qualcomm shareholders and lower the overall merits of the transaction, in our view.”

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