Approvals delay Qualcomm acquisition of NXP

Qualcomm QCOM: 68.04 -0.01 (-0.01%) has announced an extension of its deal to purchase NXP NXPI: 120.45 +0.45 (0.37%). The agreement is subject to regulatory approval in multiple jurisdictions. Similar to Broadcom’s recent purchase of Brocade this can be held up. Bloomberg is reporting that the EU is close to approving the Qualcomm/NXP deal.

But has another challenge. Activist investor Elliott Management is using a report published by bank UBS to push for a better value deal for . Elliott holds 6% of ’s stock, and are saying that the original valuation of $38bn is too low. Rather than $110 per share, should be worth $120-$150 per share. ($41bn – $51bn for the total deal). Elliott pushing for a higher value will result in Qualcomm paying more for the deal and larger profits for Elliott. Qualcomm aren’t too happy about that prospect.

“Elliott’s value assertion for NXP is unsupportable and is clearly nothing more than an attempt to advance its own self-serving agenda. We remain fully committed to closing the of NXP and believe that the agreed-upon price of $110 is full and fair.” – Qualcomm Press Release (Qualcomm Responds to Elliott Regarding NXP)

Qualcomm’s challenge is that they need to gather 80% of the shareholder’s approval to move forward, and with Elliott pushing for a higher value settlement, some may want to stick out for more cash. And in the background it’s now fighting a more agressive AVGO: 266.39 -3.41 (-1.26%) which is planning on installing a new board of directors.