US chipmaker Qualcomm swooped in with a successful £1.57bn offer to buy British tech firm CSR yesterday, fending off rival Microchip whose bids had been repeatedly rebuffed by CSR’s board.
Qualcomm’s 900p-a-share bid represents a 56.5 per cent premium to CSR’s shares prior to the start of the offer period in August.
CSR’s board accepted the offer and said it would recommend shareholders follow suit.
“At a high level, the strategic rationale is that we will benefit from the scale and from the fact that we will be working in a company that has a clear understanding of what’s happening in smartphones,” CSR chief executive Joep van Beurden told City A.M.
“And Qualcomm acquires a growth engine in verticals connected to the phone where they’re currently not that active.”
Microchip’s rival offers, believed to be based around a tax inversion deal, is unlikely to be upped in the light of proposed new tax rules in the US and Ireland, and the closing of the offer deadline last night.
“The fact that the acquiror has changed [initial interest was from Microchip] suggests this is the culmination of a competitive process and that counter bids are unlikely at this stage,” said Numis analyst Nick James. “The price looks fair to us and in-line with our thoughts following reports of initial bid interest in CSR.”
CSR’s shares rose nearly 30 per cent yesterday to close at 855.5p on news of the offer.
BEHIND THE DEAL
JP MORGAN CAZENOVE | RUPERT SADLER
1 The Cambridge graduate previously worked at NM Rothschild & Sons before joining JP Morgan Cazenove in 2006.
2 In September 2013, Sadler became managing director in the financial sponsor group of JP Morgan’s investment banking arm, based in New York.
3 Sadler knows CSR well, having previously advised on the firm’s 2011 merger with Zoran Corporation in an all-stock deal reportedly worth around $679m (£425m).
Sadler advised CSR along with Madhu Namburi, Dwayne Lysaght, Jonathan Wilcox and James Robinson from JP Morgan. CSR was also advised by a team led by Mark Sorrell from Goldman Sachs. Charlie Palmer and Rob Mindell from FTI Consulting handled financial PR for CSR.