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NI looks for white knight buyer after Emerson ups its hostile bid

Business news |
By Nick Flaherty


Test hardware and software developer National Instruments (NI) is looking for a white knight buyer after several hostile offers from Emerson in the US.

The latest bid from Emerson, made public yesterday, is worth $7.6bn ($53 a share) and was submitted in November, This follows a previous bid at $48 a share in May last year and is part of Emerson’s strategy to diversify into the test and measurement business.

Emerson says it has made numerous attempts to engage constructively with NI in private since May, and has now published the correspondence in a bid to force NI’s position.

Rumours of a bid started circulating yesterday after NI announced a strategic review that is looking for another buyer and believes it has shareholder support.

NI response

“This strategic review process includes robust solicitation of interest from potential acquirors,” said NIU. “NI’s Board of Directors will evaluate Emerson’s proposal within the context of the ongoing strategic review process, consistent with its fiduciary duties and in consultation with its financial and legal advisors. NI welcomes Emerson’s interest and participation in the process, as NI has previously informed Emerson.

“NI is focused on conducting its strategic review process in a manner that provides all interested parties with the opportunity to fairly participate on a level playing field, which we believe is the best way to ensure that the process can maximize value for all shareholders. NI appreciates the input and support the Company has received from shareholders regarding the ongoing process.”

The current bid from Emerson is at a 32% premium to NI’s closing share price on January 12, 2023,

“Although Emerson would have preferred to reach an agreement privately, given NI’s announcement that it is undertaking a strategic review, and after refusing to work with us toward 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, President and Chief Executive Officer of Emerson.

“Acquiring NI is another step forward in Emerson’s journey to develop a cohesive, higher growth and higher margin portfolio and build on its global automation focus. As Emerson outlined at our recent Investor Conference, we are transforming our portfolio toward higher-growth automation markets aligned with secular macro trends, which will deliver significant growth and profitability for years to come.”

“We have long admired NI and believe that combining its best-in-class electronic test and measurement product and software offerings with Emerson’s industry-leading automation technology and software would enhance our ability to bring comprehensive solutions to a diverse set of end markets, accelerating growth and positioning Emerson to create significant shareholder value,” he said. “We stand ready to work immediately with NI’s Board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all NI shareholders.”

Emerson sees the $35bn test and measurement market as having ‘favourable long-term trends’ and ‘complementary adjacency’ to Emerson’s portfolio, particularly in semiconductor, automotive and electric vehicles, and aerospace and defense.

“Emerson is disappointed that NI chose to announce a strategic review and put in place a poison pill on January 13, 2023, rather than engaging privately and constructively. NI did not respond to Emerson’s latest letter sent on January 11 before its public announcement,” said Emerson. “NI’s strategic review announcement comes more than two months after the NI Board purportedly formed a working group to evaluate options with its advisors – with no results.” 

“Emerson feels compelled to disclose the contents of all its correspondence with NI, beginning in May 2022, to make public its consistent and sustained track record of attempted engagement with NI, without any meaningful or constructive response,” it said.

All the gory details are at www.MaximizingValueAtNI.com.

 


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