However, will an increased offer come before the European Commission has ruled on whether to allow the deal to progress at all. Delays on both these fronts are prompting some observers to say the deal is doomed to fail.

NXP’s share price has been on a steady increase all year and the rise does not appear to be finished yet. This has been driven partly by its own success in the hot markets of automotive and industrial applications and partly by the strength of the semiconductor market in general. The former is of course one of the reasons Qualcomm – under pressure as a supplier of mobile semiconductors – wants to get its hands on NXP.

Qualcomm made its offer of $110 per NXP share back in late 2016 and even in February 2017 when the NXP share price had just gone over $100 the 10 percent premium looked inadequate, prompting us to ask whether NXP shareholders should hold out for more (see Could NXP shareholders get more cash from Qualcomm?).

NXP’s stock is now trading at $117, so why would shareholders take Qualcomm’s offer of $110.

In fact, the share price went to $110 at the end of July and was pegged at $112 until late September. At that level it was arguable that $110 in the pocket is preferable to a share that could go down as well as up. But at $117 and with the following wind behind NXP and the semiconductor market it would seem that despite the best efforts of both Qualcomm’s and NXP’s management, NXP shareholders are disinclined towards the deal.

Next: Waiting on the European Commission

And many shareholders are unlikely to make a decision while there is political uncertainty around the deal. Hanging over it is an investigation by the European Commission’s competition directorate on whether it will allow the $39 billion deal or not. Qualcomm has already made a number of concessions, according to reports, but the ruling may not come until early in 2018 (see Europe halts review of Qualcomm’s takeover of NXP).

There is a distinct possibility that the European Commission will rule against allowing the deal but even if it does give the OK, another quarter will have passed likely sending NXP’s stock price higher. This gives more time for NXP CEO Rick Clemmer and the private equity interests that own a substantial part of NXP to imagine some alternative futures for the company. Perhaps even as an acquirer of other companies.

There is plenty of analyst and broker “swirl” around the deal with some advising the sale of NXP shares on the grounds that the deal has taken too long already and is doomed and when it is abandoned NXP’s price will fall back. Others are saying it is the time to buy the stock because once European Commission approval is received Qualcomm will increase its offer to close the deal.

Either way it seems unlikely that the deal will progress at the current share price. The problem for Qualcomm is that the deal is key to its future and it does not appear to have a plan B.

Related links and articles:

News articles:

Could NXP shareholders get more cash from Qualcomm?

Taiwan hits Qualcomm with $773 million antitrust fine

Europe halts review of Qualcomm’s takeover of NXP

Qualcomm’s purchase of NXP could slip into 2018

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