NXP Semiconductors NV (NASDAQ: NXPI) is having an overwhelmingly strong day in the market today, and for good reason. Early this morning, a press release was issued by Qualcomm Incorporated (NASDAQ: QCOM) stating that it has increased its bid to acquire the company. Of course, this led to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about the news, what we’re seeing from NXPI as a result, and what we’ll be watching for ahead.
NXPI Gains On Increased Bid From QCOM
As mentioned above, NXP Semiconductors is having a strong day in the market today after news broke that Qualcomm River Holdings B.V., an indirect wholly owned subsidiary of Qualcomm, has reached an agreement with the company. Under the agreement, QCOM will increase it’s previous purchase offer and purchase NXPI at a price of $127.50 per share.
The amendment to the agreement lowers the minimum tender condition from 80% of NXPI outstanding shares to 70%. In the release, it was announced that the boards of both companies have unanimously approved the amendment. QCOM also said that it has entered an agreement with nine shareholders of NXP Semiconductors who collectively own more than 28% of the company’s outstanding shares. Under this agreement, QCOM will purchase the shares at $127.50 each. In a statement, Steve Mollenkopf, CEO at Qualcomm, had the following to offer with regard to the acquisition of NXPI:
Qualcomm’s leading SoC capabilities and technology roadmap, coupled with NXP’s differentiated position in Automotive, Security and IoT, offers a compelling value proposition. We remain highly confident in our fiscal 2019 Non-GAAP EPS target of $6.75-$7.50, which includes $1.50 per share accretion from the acquisition of NXP. With only one regulatory approval remaining, we are working hard to complete this transaction expeditiously. Other integration planning is on track and we expect to realize the full benefit of this transaction for our customers, employees and stockholders.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, NXP Semiconductors will be paid more through the acquisition. Of course, this led to excitement among investors, sending the stock rocketing for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:51), NXPI is trading at $125.85 per share after a gain of $7.35 per share (6.20%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NXPI. In particular, we’re interested in following the story surrounding the acquisition that is taking place here. Keep in mind, the takeover is still subject to regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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