☐	Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

  

 

This Amendment No. 4 (“Amendment No. 4”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the SEC by the undersigned on December 11, 2017 (together with any subsequent amendments and supplements thereto, the “Schedule 14D-9”).  The Schedule 14D-9 relates to the Tender Offer by Qualcomm River Holdings B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of The Netherlands (the “Purchaser”), a wholly owned subsidiary of QUALCOMM Incorporated, a Delaware corporation, as disclosed in the Tender Offer Statement on Schedule TO, filed by the Purchaser with the SEC on November 18, 2016, to purchase all outstanding common shares, par value €0.20 per share (the “Shares”), of NXP Semiconductors N.V., a public limited liability company (naamloze vennootschap) organized under the laws of The Netherlands (“NXP”), at a price of $110.00 per Share, less any applicable withholding taxes and without interest to the holders thereof, payable in cash, upon the terms and conditions set forth in the Purchaser’s Offer to Purchase dated November 18, 2016, and in the related Letter of Transmittal.

The information in the Schedule 14D-9, including all exhibits and annexes that were previously filed with the Schedule 14D-9, is incorporated in this Amendment No. 4 by reference, except that such information is hereby amended or supplemented to the extent specifically provided herein. Capitalized terms used herein and not defined shall have the meaning ascribed to such terms in the Schedule 14D-9.

Item 4 is hereby amended to add the following:

On February 1, 2018, the Filing Persons delivered materials to NXP shareholders and issued a press release announcing the delivery of the shareholder materials.  The shareholder materials and press release are attached hereto as Exhibit 9 and Exhibit 10, respectively, and are incorporated by reference herein.

Item 9 is hereby amended to add the following:

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 Dated: February 1, 2018

Exhibit 9

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

Dear Fellow NXP Shareholder:

Our firm, Elliott Advisors (UK) Limited (“Elliott”), advises funds which collectively hold an economic interest in NXP Semiconductors N.V. (“NXP”) of approximately 7.2%, representing an increase from approximately 6% since our Shareholder Letter dated December 11, 2017.  Our increasing economic interest in NXP, which has current market value of approximately $2.9 billion, underscores our significant level of conviction in the value opportunity present at NXP today, as well as our alignment of interest with our fellow NXP shareholders.

Today, in order to provide additional perspectives on NXP, we are writing to you to outline our view that a take-out price that is fair and reasonable for both QUALCOMM Incorporated (“Qualcomm”) and NXP shareholders needs to include a customary change-of-control premium, and Qualcomm can afford to pay such premium.  In short, we believe the current $110 offer is not even in the right zip- code and a credible offer from Qualcomm requires a price in excess of our estimate of NXP’s intrinsic standalone fair value of $135 per share¹.

Our letter is organised as follows:

 

·	Our views on why NXP is uniquely able to fulfil Qualcomm’s long-term strategic aims;
·	Why we believe a price in excess of $135 per share for NXP is a fair and reasonable take-out price for an acquisition of NXP by Qualcomm; and
·	Why we believe the benefits of the transaction to Qualcomm: (i) justify a price not only well above its current offer of $110 per share, but also in excess of our view of NXP’s intrinsic standalone value of $135 per share, and (ii) deliver significant value to Qualcomm’s own shareholders.

 

 

 

___________________________

¹ NXP’s standalone value is set out in Elliott’s press release and investor presentation, dated as of December 11, 2017, which can be viewed at www.FairValueforNXP.com

 

NXP is of significant strategic importance to Qualcomm

NXP is one of the world’s leading semiconductor firms, and we have tremendous respect for what Rick Clemmer and his team have accomplished.  They deserve enormous credit for the achievements to date, and we recognise that the value opportunity described in this letter is only possible due to what they have built over the years.

We believe Qualcomm’s business is in need of a radical overhaul and its prior narrowly focused strategy resulted in its share price significantly underperforming its peers (Qualcomm’s stock price underperformed the SOX by 134% in the 36 months prior to the emergence of the Broadcom Limited (“Broadcom”) bid²) and, as a consequence, left Qualcomm vulnerable to a hostile takeover.  Qualcomm’s decision to make a transformative acquisition with the acquisition of NXP was, in our view, a signal that a rapid and significant change was needed to reverse the chronic underperformance.  Implementing a one-time, sizeable share repurchase programme is no substitute for an attractively priced, synergistic, strategic transaction – even if the estimated short-term EPS accretion is coincidently identical.  We believe NXP uniquely fits Qualcomm’s long-term strategic aims, enhances Qualcomm’s equity story and should re-rate Qualcomm's trading multiples for the following reasons:

 

·	NXP is uniquely positioned within the semiconductor market to radically enhance Qualcomm’s business mix and provide access to key high growth segments (auto and industrial), which will form a core pillar of Qualcomm’s long-term strategy.  In our view, no other potential target for Qualcomm with a similar revenue contribution in similar end markets has the same strategic fit as NXP does due to NXP’s position across infotainment, in-vehicle networking and safety systems within automotive, leadership in broad-based MCUs and secure element technologies;
·	Acquiring NXP allows Qualcomm to diversify away from its declining licensing business, reducing Qualcomm’s vulnerability to decreasing royalty rates and intensifying competition, while expanding into strategically relevant, high growth end-markets;
·	A combined Qualcomm/NXP business will, in our view, have an enhanced financial profile, with far superior top line growth, margin and cash conversion metrics relative to Qualcomm’s standalone prospects.

As well as being a unique acquisition target with unparalleled strategic fit, we believe NXP is the most actionable transaction for Qualcomm, given that it has already undergone approximately 14 months³ of regulatory reviews and integration planning.  We believe any other transaction would likely seriously delay Qualcomm’s strategic overhaul, an overhaul which has been at the heart of their defence against Broadcom’s hostile offer.

 

We do not believe we are alone in our assessment of the potential combination - Qualcomm shareholders have already applauded the deal as evidenced by Qualcomm’s stock rising by an amount equal to 29% of NXP’s market capitalisation⁴ in the month⁵ following initial rumours of the transaction.  Additionally, the following quotes represent only a small sample of commentary from both Qualcomm senior management and equity research analysts highlighting the important benefits of NXP to Qualcomm:

 

	In our view, Qualcomm’s acquisition of NXP will give it instant leadership in the automotive market which could also secure opportunities for Qualcomm’s LTE and 5G technology to become the automotive standard…   Stifel, QCOM: Expecting In-line Quarter; Weak FTC Complaint, 18 Jan 2017
	With the addition of NXP, the opportunity to grow content in the car increases dramatically.  And we will be uniquely positioned for ADAS and autonomous driving, a large multi-decade megatrend that is just starting.  You will be hearing more from us on this important topic in the future.   Steven Mollenkopf, Qualcomm CEO, Q2 2017 Earnings Call
	NXP would help Qualcomm diversify semiconductor exposure away from smartphones, and lessen the company’s dependence on licensing profits.   BofAML, QCOM: Modeling scenarios for Apple; worst case baked-in, yet expect continued volatility, 2 Feb 2017
	In addition, we believe the pending NXP acquisition will provide us with greater scale in automotive, IoT, security and networking with their highly complementary product and world-class sales channel, serving a long tail of customers that are driving growth.  The combined company will be a technology and semiconductor leader with future annual revenues projected to be more than $30 billion.   Steven Mollenkopf, Qualcomm CEO, Q3 2017 Earnings Call
	We believe we are on a path to build Qualcomm into the semiconductor engine for the connected world.   Steven Mollenkopf, Qualcomm CEO, Q4 2016 Earnings Call
	This is also a financially compelling acquisition.  We expect it to be significantly accretive to non-GAAP EPS immediately upon close and we've identified $500 million in cost synergies.  Our capital structure post-close will remain conservative and we remain committed to maintaining a strong investment- grade rating.  We expect to delever quickly giving us strategic flexibility and providing strong support for future capital returns to our stockholders.   Steven Mollenkopf, Acquisition of NXP Semiconductors N.V by Qualcomm Incorporated Call, 27 October 2016
	The NXP business, its access to technology and technology scale that would be very hard to do in a stand-alone way.   Steven Mollenkopf, CNBC Transcript: Qualcomm CEO Steve Mollenkopf Speaks with CNBC's David Faber on “Squawk on the Street” Today, 31 July 2017

 

We believe an offer in excess of $135 per share is fair and reasonable for both NXP and Qualcomm shareholders

Take-out premia in all cash transactions (%)

 

	Average	Median	# deals
Semiconductor M&A transactions5	37.1	37.6	12
Large Cap M&A transactions6	37.0	34.7	45

Furthermore, an offer at a premium to standalone value is warranted and justified if a transaction is synergistic to the buyer – Qualcomm has announced a synergy estimate of $500 million.¹⁰ However, an analysis of historical synergy targets in semiconductor transactions highlighted below suggests this estimate may prove to be conservative.  We believe NXP shareholders should expect to fairly share in the synergy value created by the transaction.

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Based on the foregoing it is our view that the per share standalone value for NXP provides the floor from which to begin a discussion regarding an appropriate price in a takeover situation – not the end point.  We see no reason why NXP shareholders should be uniquely disadvantaged and not fairly share in the synergies associated with this transaction, which we believe are worth between $19.2 and $48.0 per NXP share¹³ in addition to standalone intrinsic value.  Qualcomm recently argued that its shareholders should reject a transaction which “substantially undervalued” their shares at 10x 2019 P/E when the SOX is trading at 19x – yet is currently trying to acquire NXP at only 12x when it appears that NXP has none of the long term strategic issues that plague Qualcomm¹⁴.

 

We believe our own financial analysis and the UBS Financial Analysis (that UBS prepared for us and we have made available at www.FairValueForNXP.com) show the financial impact of the NXP deal to Qualcomm remains highly attractive at prices greater than NXP’s fundamental stand-alone value of $135 per share and continues to create significant value for Qualcomm shareholders.

Specifically, the UBS Financial Analysis substantiates our views regarding the financial value of this deal to Qualcomm in several ways.  We believe that the acquisition:

 

·	Is highly accretive to Qualcomm’s 2019 EPS: approximately 33 to 56% accretive at prices of $145 to 15515 (which would still imply a large discount to precedent transaction P/E multiples of 22x)16;
·	Delivers a return on invested capital in excess of Qualcomm’s weighted-average cost of capital17;
·	Will transform the Qualcomm business mix and provide a superior financial profile which is likely to result in a re-rating and could lead to an increase in excess of 30%18 from Qualcomm's undisturbed share price.  In our view, Qualcomm will not be able to crystallise this upside through a large buyback as it will not improve Qualcomm’s business profile and is therefore unlikely to lead to multiple re-rating.

 

We believe a transaction can be structured such that all these benefits would be reaped by Qualcomm without taking on any material incremental leverage and thus financial risk.

On the basis of all the above, even if one’s view of NXP’s intrinsic stand-alone fair value is below Elliott’s own estimate of $135 per share, we believe the analysis supports the finding that Qualcomm can deliver value to its shareholders at prices for NXP higher than $135 per share.

Thank you,

Elliott Advisors (UK) Limited

 

 

 

 

 

Who we are

Founded in 1977, Elliott Management Corporation is one of the oldest private investment firms of its kind under continuous management.  The firm’s investors include pension funds, private endowments, charitable foundations, family offices, and employees of the firm.  Elliott Advisors (UK) Limited is an affiliate of Elliott Management Corporation.

Our approach to NXP is consistent with our approach to many of our current and previous investments.  We have invested a significant amount of time and resources into understanding NXP, including hiring numerous advisors and consultants with whom we have worked together to receive input from over 50 industry participants.  We believe strongly in the value conclusions that we have drawn as a result of this effort.

For more information

We have created a website where NXP shareholders can review additional information about Elliott’s views on NXP including its standalone valuation and an assessment of a fair take-out price.

 

Information agent

 

 

 

www.FairValueForNXP.com

6

Exhibit 10