News Analysis: Is NXP really not wanting to marry or winking?

A few days ago the industry rumors that the Dutch chip maker NXP Semiconductor is seeking to sell, and has already negotiated with potential buyers such as Intel, Qualcomm, Broadcom; but later NXP CEO Rick Clemmer Jumping out denies that any acquisition negotiations are ongoing.

The news that NXP seeks to sell is from Dutch local media De Telegraaf, quoting an anonymous financial community. Clemmer's rebuttal of the above news came from Reuters; so what exactly is this? ? I think there are two possible situations: One is purely "stock trading," and the other is more complicated.

In trading stocks, stock traders usually hold certain shares of a certain company and then release a special event rumors in the market, such as mergers and acquisitions. When a company's share price rises due to rumours, the initiators take advantage of the high prices. Clearing out of the stock, but other investors continue to buy the stock. When the final rumors are denied or not broken, the stock of a certain company will fall back to its original level. The result is that those stockholders make big profits for other shareholders in a short period of time.

There are many cases of such rumors. For example, in 2010, the market rumors that ARM's news of buying buyers are quite typical of this type of stock-laying tactics; only those who put rumors should be very close to ARM, and understand the company's marketing and public Relationship strategy, so it should also know that no one can gain benefits over IP licensing business by selling the company.

To this end, Warren East, chief executive of ARM, is still trying to swear by many occasions, saying that there is no plan for sale, and he also does not understand the logic of such rumors. It is because such a rumor is not highly likely to have a limited effect on the stock price. ARM's share price has even fallen due to rumors.

But in the case of NXP Semiconductors, the company's share price rose slightly on the day of the news (Friday, US time), and continued to rise to 30 U.S. dollars on Monday; pay special attention to this news from the financial circle. Spread out, that is, the headquarters of speculation in stock trading.

NXP and ARM are also completely different cases: NXP’s current owner, who is publicly listed, is a private equity fund company. He hopes to seek remuneration for the company’s investment and may even think about retreat; in addition, NXP’s own NFC wireless technology may indeed Let Intel, Qualcomm or Broadcom and other companies interested.

On the other hand, NXP's business scope is still relatively extensive - although CEO Clemmer is leading the company's transformation plan, the company is also considered to be indebted, and the rumors of the three buyers is an advantage of the chip maker; there is such a rumbling outflow , the inside story may not be simple.

As for the other more "complex" situation? My guess is that because the rumors come from the financial circle, there are likely to be potential buyers of Intel, Qualcomm, and Broadcom. They have actually made acquisitions with the group of private equity firms that hold the majority stake in NXP. Negotiate?

Currently includes Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners, Bain Capital, Apax Partners Worldwide, and AlpInvest Partners, among others, have a total of 80% of NXP shares worth 6.4 billion euros (about 8 billion U.S. dollars). Most of them have good relations with Intel, Broadcom and Qualcomm headquarters.

Clemmer refutes NXP's statement that it has not conducted a sales negotiation, and it also reveals some clues (Reference: NXP not in talks, will consider offer), which may imply that the company has indeed become an acquisition target.

The Reuters report quoted Clemmer saying that NXP would consider a bid of $55 to $60 per share, which is a signal; his heart's OS might be: "If people want to buy, shut up if they don't say anything; Behind me, if you want to shout out, come on!"

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