Emerson Electric unveils $7 billion hostile bid for National Instruments
Jan. 17 (Reuters) – US engineering and industrial software company Emerson Electric Co (EMR.N) On Tuesday, it revealed an offer of about $7 billion for National Instruments Corp (NUT.O)which she had been unsuccessfully trying to buy for several months.
The software company’s all-cash bid of $53 a share, first submitted to NI on Nov. 3, represents a premium of about 13% through NI’s close on Friday. NI shares hit a record high of $54.69 in early morning trading Tuesday, while Emerson stock fell 5%.
Reuters was the first to report on January 13 about Emerson’s interest in the acquisition of NI, after the latter announced a strategic review and adopted the so-called “poison pill”.
Emerson said it first reached out to NI in May of last year with an offer of $48 per share, and that it is ready to nominate directors for NI’s board of directors before the Jan. 27 deadline.
“After refusing to work with us for a premium cash transaction over the past eight months, we are making our interest public for the benefit of all NI shareholders,” said Lal Karsanbhai, CEO of Emerson.
In November, after another round of exchanges between the two companies, NI told Emerson that it had created a “working group of its board” to examine the improved offer and explore options with the help of its advisors.
“In the more than two months since then, NI has continued to resist engaging meaningfully with Emerson to work toward an agreement,” Emerson said in a statement. The company said Emerson has already purchased 2.3 million shares of NI and obtained regulatory clearance to increase its stake.
In a separate statement, NI said it had decided to pursue a “comprehensive review” that would include interest from other potential buyers, “rather than negotiating exclusively with Emerson, which NI believes would be detrimental to shareholder interests.”
Emerson has been involved in a series of deals over the past few years to establish itself as a provider of automation products and services, and the bid to buy NI is a new multibillion-dollar bet in that direction.
In October, Emerson sold a majority stake in its climate technologies unit to Blackstone Inc (BX.N) In a deal valued at $14 billion in business.
At the time, Emerson said it would use proceeds from the deal for “strategic mergers and acquisitions to enhance and diversify its automation portfolio in four adjacent target markets.”
Last year, Emerson also sold its division that makes waste disposal equipment and hot water dispensers to Whirlpool Corp. (WHR.N) It merged its software units with smaller rival Aspen Technology (AZPN.O).
NI, formerly National Instruments, specializes in making automated test and measurement instruments to aid in the research and validation of new technologies. It serves the semiconductor, transportation, aerospace and defense industries.
The project value of the offer is $7.6 billion. Emerson said the offer was not subject to any financing conditions.
Citi Research wrote in a note Sunday that NI could be a good strategic fit for Emerson, given that it cited the test and measurement markets as an area of focus.
Goldman Sachs and Centerview Partners LLC are acting as financial advisors to Emerson and Davis Polk & Wardwell LLP and Sidley Austin LLP as legal advisors. NI is notified by BofA Securities, Wachtell, Lipton, Rosen & Katz.
Additional reporting by Nathan Gomez and Priyamvada C in Bengaluru, with additional reporting by Aishwarya Nair and Chebuike Ogo. Writing by Anirban Sen; Editing by Savio D’Souza, Krishna Chandra Eluri, and Lisa Shumaker
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