In exchange, Qualcomm entered into a binding agreement with nine shareholders of NXP to back the deal. The nine shareholders own more than 28% of NXP shares, including activist investor Elliott Management.
This is by far the most provocative move by Qualcomm to defeat Broadcom's $ 121 billion hostile takeover. The new agreement will pressure Broadcom to decide whether to stick to the terms of the tender offer - Qualcomm may not raise the offer to acquire NXP. It may strengthen Qualcomm's defensive capabilities as it enables shareholders to better gauge the independent value of Qualcomm without having to close a sales deal with Broadcom.
Qualcomm shares fell 1.3% on Tuesday to 63.99 US dollars, significantly lower than Broadcom in February 5 recently proposed $ 82 per share in cash and stock offer. Investors believe Qualcomm's latest offer to NXP has raised the company's chances of repulsing a malicious stake in Broadcom.
Broadcom said on Tuesday that it is evaluating options to respond to Qualcomm's latest move and believes the revised offer goes well beyond QUALCOMM's "full and fair" offer, which has been repeatedly reiterated, shifting the value of QUALCOMM's shareholders to NXP's shareholders.
Broadcom believes the rise in quotes shows that Qualcomm's board ignored its fiduciary responsibility - creating the greatest value for Qualcomm shareholders, "Broadcom said in a statement after Qualcomm raised its offer.
"We think our shareholders want more certainty on NXP transactions," Holden said. "Qualcomm will be much stronger and will generate more profit regardless of whether we have a deal with Broadcom or not."
Driven by this news, NXP shares rose 6% to 125.56 US dollars. In the past seven months, NXP's share price has been higher than Qualcomm's initial offer, reflecting investors expect Qualcomm will raise prices.
Currently, only China's Ministry of Commerce has yet to approve Qualcomm's acquisition of NXP in global regulators.