Emerson Electric Co. EMR -6.81% has nearly $7 billion bid to acquire National Instruments Corp. NATI 10.79%, which it says has been trying to buy for more than eight months.
Emerson, a St. Louis-based technology and engineering company, said it was offering $53 per share in cash for National Instruments, valued at $7.6 billion. The offer represents a 32% premium to National Instruments’ closing price last Thursday, a day before the Texas-based equipment and instrument company said its board is evaluating strategic alternatives and has already been approached by potential buyers.
Emerson’s public offering comes eight months after National Instruments rejected its bid for a $48-per-share acquisition, the company said. Emerson raised his offer to $53 a share in November, but now claims National Instruments continued to reject his advances.
National Instruments confirmed Tuesday that it had received Emerson’s offer, but said it remains committed to the strategic review process announced Friday.
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By issuing the offer, Emerson hopes to attract shareholders who were previously “unaware of this opportunity to realize an immediate cash premium,” Chief Executive Lal Karsanbhai said in a conference call on Tuesday.
“Emerson urges NI shareholders to work with their board of directors to ensure this public strategic review process is not just another delaying tactic,” he said.
National Instruments shares rose more than 16% Tuesday to a record high of $54.69. Emerson shares, meanwhile, fell 7% to a low of nearly $91 and are facing one of their steepest losses since June 2020, according to Dow Jones Market Data.
Emerson said the addition of National Instruments’ portfolio of electronic test and measurement offerings would strengthen the automation business while increasing adjusted earnings within the first year. The company is not providing financing terms for the deal and says it can fund the transaction with cash and existing lines of credit.
In a call with analysts, the company reported eight months of snubs from National Instruments’ board of directors, which began in May when Emerson said it had sought an in-person meeting about a potential deal, instead offering a phone call with management. Emerson sent a formal letter shortly thereafter with his cash offer of $48 per share, but National Instruments declined it, the company said.
National Instruments continued to reject offers for private negotiations in the months that followed, Emerson said.
Emerson also noted that during this period, National Instruments purchased more than two million shares of its own stock at a weighted average price of $40.25. Mr Karsanbhai on Tuesday criticized the company for launching one of the largest buybacks ever at a price per share well below Emerson’s offer.
Emerson submitted its improved offer to purchase National Instruments on November 3 for $53 per share, representing a 45% premium to the company’s share price at the close of the day. The National Instruments board of directors responded at the time that it formed a working group to evaluate the proposal and consider its strategic options, but otherwise declined to work with Emerson, Emerson said.
National Instruments said Tuesday that it welcomed Emerson’s participation in its strategic review process, but believed that negotiations solely with the company “would be detrimental to shareholders.”
“NI notes Emerson’s expressed disappointment in these efforts to maximize NI’s shareholder value,” the company said.
Write to Dean Seal at [email protected]
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