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Elliott Management heaps pressure on Qualcomm, says chip maker’s shares are undervalued.
Activist investor Elliott Management late last week revealed it has acquired a 6% stake in NXP Semiconductors, heaping further pressure on rival chipmaker Qualcomm to raise its bid for the company.
Elliott said in an SEC filing on Friday it believes NXP’s shares are "significantly undervalued and represent an attractive investment."
In a bid to maximise shareholder value, Elliott said it has engaged with NXP’s management, board, other shareholders or third parties – including potential acquirers – regarding the company’s operations and strategy, which includes the "pending transaction between the issuer (NXP) and Qualcomm."
Qualcomm agreed to acquire NXP in October 2016 in a deal worth $47 billion.
The deal faces heavy scrutiny from the European Commission, which is concerned that the merger could harm competition in the baseband and near-field communication (NFC) chipset markets, and the vehicle-to-everything (V2X) market. Its in-depth probe was paused in late June after Qualcomm and NXP reportedly failed to submit relevant information.
As Elliott’s stake-taking highlights, Qualcomm is also under pressure to increase its offer for NXP.
Late last month, Qualcomm again extended the deadline for its tender offer for all outstanding NXP shares, this time until close of business on 24 August, revealing that the percentage of shares tendered had fallen to 7.6%.
The last time Qualcomm extended the deadline, in June, 12.5% of NXP shares had been tendered. When Qualcomm extended its offer deadline in May, the percentage was 14.9%.
