By Nathan Gomes, Priyamvada C and David Carnevali
(Reuters) - U.S. engineering and industrial software company Emerson (NYSE:EMR) Electric Co on Tuesday disclosed a nearly $7 billion offer for National Instruments (NASDAQ:NATI) Corp, which it has been trying to buy unsuccessfully for several months.
The software firm's all-cash bid of $53 per share, which was first submitted to NI on Nov. 3, represents a premium of about 13% to NI's close on Friday. Shares of NI hit a record high of $54.69 in early morning trade on Tuesday, while Emerson fell 5%.
Reuters was first to report on Jan. 13 Emerson's acquisition interest in NI, after the latter announced a strategic review and adopted a so-called "poison pill".
Emerson said it first approached NI in May last year with an offer of $48 per share and is prepared to nominate directors to NI's board before the Jan. 27 deadline.
"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, CEO of Emerson.
In November after another round of back-and-forth 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 advisers.
"In the more than two months since, NI continued to resist engaging meaningfully with Emerson to work toward an agreement," Emerson said in a statement. Emerson has already bought 2.3 million NI shares and has obtained regulatory clearance to further increase its stake, the company said.
In a separate statement, NI said it decided to pursue a "comprehensive review" that would include interest from other potential buyers, "rather than negotiate exclusively with Emerson, which NI believes would be detrimental to shareholder interests."
STRING OF DEALS
Emerson has been involved in a string of deals over the last few years to pivot itself as a provider of automation products and services, and the offer to buy NI is a fresh multi billion-dollar bet in that direction.
In October, Emerson sold a majority stake in its climate technologies unit to Blackstone (NYSE:BX) Inc in a deal that valued the business at $14 billion.
At the time, Emerson said it would use the proceeds from the deal for “strategic M&A to strengthen and diversify its automation portfolio in four targeted adjacent markets."
Last year, Emerson also sold its division that makes waste disposal equipment and hot water dispensers to Whirlpool Corp (NYSE:WHR) and merged its software units with smaller rival Aspen Technology (NASDAQ:AZPN).
NI, formerly known as National Instruments, specializes in making automated testing and measurement tools to aid in research and validation of new technologies. It serves semiconductor, transportation, aerospace and defense industries.
The enterprise 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 on Sunday that NI could be a good strategic fit for Emerson, given it has indicated test and measurement markets as an area of focus.
Goldman Sachs (NYSE:GS) and Centerview Partners LLC are serving as financial advisers to Emerson and Davis Polk & Wardwell LLP and Sidley Austin LLP are serving as legal advisers. NI is being advised by BofA Securities and Wachtell, Lipton, Rosen & Katz.