Emerson Electric Co. went public with its months-long pursuit of National Instruments Corp., revealing a bid to take over the maker of measurement systems for about $7 billion.
(Bloomberg) — Emerson Electric Co. went public with its months-long pursuit of National Instruments Corp., revealing a bid to take over the maker of measurement systems for about $7 billion.
St. Louis, Missouri-based Emerson made a cash bid of $53 per share in November, it said in a statement Tuesday, confirming an earlier Bloomberg News report. The latest bid was an improvement on an earlier proposal of $48 per share made in May, it said.
Emerson has already purchased 2.3 million NI shares and has regulatory approval to boost its stake, it said. The company is prepared to nominate alternative directors for election to NI’s board, according to the statement.
Shares of NI rose as much as 16.4% on Tuesday. The stock was up 13% at 11:41 a.m. in New York, giving the company a market value of about $6.9 billion. Emerson fell as much as 7.1%, giving it a market value of about $53 billion.
“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,” Emerson Chief Executive Officer Lal Karsanbhai said in the statement.
Strategic Review
NI confirmed in a statement that it had received the takeover proposal from Emerson and said it welcomed its “interest and participation in the process.” Still, it wants to keep talking to others before making a decision.
“NI determined to affirmatively initiate, announce and pursue a comprehensive strategic review process inclusive of other counterparties rather than negotiate exclusively with Emerson, which NI believes would be detrimental to shareholder interests,” the company said.
It said Friday it was exploring strategic options including a sale after receiving approaches from potential buyers it didn’t identify.
The Austin, Texas-based firm also said it will adopt a limited-duration shareholder rights plan, to expire in about one year. These plans, known as poison pills, are a defensive tactic for keeping potential acquirers at bay by preventing them from building large stakes.
Emerson’s offer of $53 per share, which values NI at $7.6 billion including debt, represents a 32% premium to NI’s closing share price the day before the strategic review was announced.
Deal Hunt
The industrial company is working with Goldman Sachs Group Inc. and Centerview Partners LLC on the NI bid, as well as proxy solicitors at Innisfree and legal advisers Davis Polk & Wardwell and Sidley Austin. Emerson said its proposal isn’t subject to any financing conditions and would require only limited confirmatory due diligence.
Emerson agreed in October to sell control of its $14 billion climate technologies arm to Blackstone Inc. It said at the time it planned to use some of the $9.5 billion in upfront proceeds for strategic acquisitions to expand its automation portfolio.
The company has been reshuffling its business mix through divestitures after merging its industrial software business last year with Aspen Technology Inc. In August, Emerson agreed to sell its garbage-disposal arm to Whirlpool Corp. for $3 billion.
NI provides testing and measurement equipment and software. In recent years, it’s expanded its portfolio through acquisitions into solutions for electric vehicles, batteries and driver-assistance systems. The company is working with Bank of America Corp. and Wachtell Lipton Rosen & Katz on the strategic review.
–With assistance from Trista (Xinyi) Luo.
(Updates with response from NI starting in the sixth paragraph, further details from statement, background on Emerson dealmaking.)
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