Broadcom Cuts Offer for Qualcomm, Putting Hostile Takeover in Doubt

Ivan Schwartz
February 22, 2018

Broadcom Ltd. announced early Wednesday that it would be lowering its hostile takeover bid for Qualcomm Inc., following Qualcomm's decision to raise its own bid for NXP Semiconductors NV. The company has market cap of $29.62 million.

Qualcomm had set the deal with NXP in motion in October 2016, before Broadcom put forth an acquisition offer past year in November. Sanford C. Bernstein cut shares of NXP Semiconductors from an "outperform" rating to a "market perform" rating and set a $125.00 price target for the a research note on Thursday, October 26th. (NASDAQ:FOXA) persists its position slightly strong in context of buying side, while shares price inched down -0.88% during latest trading session. About 10.76M shares traded or 235.03% up from the average. It has outperformed by 7.97% the S&P500.

The 44 billion USA dollars deal comes one week after leaders of Qualcomm met with Broadcom executives to discuss a 146 billion US dollars buyout, according to media reports.

Some buy side analysts are also providing their Analysis on NXP Semiconductors NV, where 0 analysts have rated the stock as Strong buy, 0 analysts have given a Buy signal, 3 said it's a HOLD, and 0 analysts rated the stock as Sell. Therefore 83% are positive. NXP Semiconductors NV had 64 analyst reports since August 3, 2015 according to SRatingsIntel. The rating was initiated by Sterne Agee CRT with "Buy" on Wednesday, September 9. Citigroup maintained it with "Sell" rating and $79 target in Friday, October 27 report. The firm earned "Buy" rating on Monday, April 11 by Nomura. Jefferies maintained NXP Semiconductors N.V. (NASDAQ:NXPI) on Monday, July 10 with "Hold" rating. The rating was maintained by Needham with "Buy" on Friday, January 19. On Friday, October 28 the stock rating was downgraded by Robert W. Baird to "Neutral". On Friday, October 28 the stock rating was downgraded by Suntrust Robinson to "Hold".

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Analysts await NXP Semiconductors N.V. (NASDAQ:NXPI) to report earnings on May, 2. They are also projecting the Low EPS estimate of $1.52 and the High EPS estimate of $1.88. Suggesting that the new offer significantly undervalues the business even more so than the original bid had.

AMP Capital Investors Ltd boosted its holdings in shares of NXP Semiconductors by 1.0% in the 3rd quarter. Its up 0.09, from 1.13 in 2017Q2. It is positive, as 40 investors sold MSFT shares while 952 reduced holdings. Ferguson Wellman Capital Inc owns 420,085 shares for 0.37% of their portfolio.

Taking look on ratio analysis, FOXA has forward price to earnings ratio of 15.95, compare to its price to earnings ratio of 25.55. Numen Capital LLP now owns 134,000 shares of the semiconductor provider's stock valued at $12,824,000 after buying an additional 102,000 shares during the last quarter. State Street has 0% invested in GenMark Diagnostics, Inc. Deltec Asset Limited Liability holds 4,250 shares. Wasatch Advisors invested in 0.03% or 22,079 shares. (NASDAQ:TTWO). Alpine Global Management Llc reported 18,392 shares. The stock of GenMark Diagnostics, Inc. D E Shaw & holds 0% of its portfolio in GenMark Diagnostics, Inc. Bridgeway Capital Inc holds 1.18 million shares or 1.05% of its portfolio. 553 were accumulated by Barclays Pcl. Sei Invs holds 255,420 shares.

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