Elliott Advisors (UK), which advises funds that collectively hold an economic interest in NXP Semiconductors of approximately 6%, published an open letter stating that Qualcomm's offer to acquire the company is too low. Elliot believes NXP is worth $135 per share on an intrinsic standalone basis – far above the $110 offered by Qualcomm.
Elliott states Qualcomm’s offer of $110 per share is acting as "a ceiling on NXP’s valuation", noting that NXP’s peers have traded up 65% since rumors of Qualcomm’s interest arose.
“We believe NXP’s prospects are bright. Approximately half of NXP’s revenue is exposed to exciting growth engines of the semiconductor market – automotive and industrial,” Elliott stated in its letter to shareholders. “We believe NXP shareholders have the opportunity to unlock a material valuation gap that exists today.”
Qualcomm to Acquire NXP -- Engines for the Connected World
NXP Semiconductors N.V., which headquartered in Eindhoven, Netherlands, employs approximately 45,000 people in more than 35 countries and is known for its mixed-signal semiconductor electronics. The company was known as Philips Semiconductor prior to 2006.Key markets include automotive, broad-based microcontrollers, secure identification, network processing and RF power. NXP has a broad customer base, serving more than 25,000 customers through its direct sales channel and global network of distribution channel partners.
For Q3 2016, NXP reported revenue of $2.469 billion, up 4.4% over a year ago, and GAAP gross profit of $1.184 billion, up 7.7% over a year ago.
The combined company is expected to have annual revenues of more than $30 billion, serviceable addressable markets of $138 billion in 2020 and leadership positions across mobile, automotive, IoT, security, RF and networking.
