Elliott discloses NXP stake, Qualcomm’s $38 billion bid in its radar

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(Reuters) – Activist investor Elliott Management Corp on Friday disclosed a 6 percent stake in chipmaker NXP Semiconductors NV (NXPI.O), which is being bought by Qualcomm Inc (QCOM.O) for $38 billion, and indicated it could engage in talks to boost the offer price.

Elliott’s stake makes it NXP’s largest shareholder, and the hedge fund’s biggest semiconductor campaign to-date.

The fund said in a filing that it believed NXP’s shares were “significantly undervalued”, and added it may make proposals related to the company’s business, including the Qualcomm deal. (bit.ly/2u7SzKT)

Bloomberg had reported in May that investors, including Elliott, were pressuring NXP to renegotiate with Qualcomm to raise its offer. (bloom.bg/2qzW3o0)

“While we believe NXP could be worth $110 or more on a stand-alone basis, some investors believe that Qualcomm should pay up to $130 per share for NXP,” Susquehanna Financial Group analysts wrote in a note dated July 7.

NXP shares were trading up 1.7 percent at $112.50, just above Qualcomm’s $110 per share offer for the company.

Qualcomm, which supplies chips to Android smartphone makers, is set to become the leading supplier to the fast-growing automotive chip market following the deal, the largest-ever in the semiconductor industry.

The deal is currently expected to close by the end of 2017.