U.S. chipmaker Qualcomm raised its offer to buy NXP Semiconductors to $127.50 per share on Tuesday, and said it has the backing of the shareholder group led by hedge fund Elliott Management that opposed its previous proposal.
The new deal puts pressure on fellow chipmaker Broadcom to decide if it will stick with a stipulation in its $121 billion bid for Qualcomm that the company not raise its previous $110 a share offer for NXP.
It also enables Qualcomm shareholders to better assess the standalone value of Qualcomm as they consider whether to back it in a shareholder vote on its fight with Broadcom on March 6.
"We will see what (Broadcom) does now," Bernstein analyst Stacy Rasgon said.
"While their current offer is 'premised' on NXP going at $110, they would of course not necessarily be precluded from making a new offer premised on the new NXP price."
Broadcom said on Tuesday it was evaluating its options and that the revised price for NXP was well beyond what Qualcomm has repeatedly characterized as a "full and fair."
The new offer comes less than a week after Broadcom and Qualcomm executives met face-to-face to discuss the differences between the two sides. Neither company responded to requests for comment on Tuesday's offer.
Proxy advisory firm Glass Lewis on Tuesday recommended Qualcomm shareholders vote for all six director nominees Broadcom has put forward. Last week, Institutional Shareholder Services had recommended four Broadcom nominees.
NXP's shares rose 6.2 percent to $125.80 on opening. The stock has traded above the original offer price for nearly seven months, reflecting expectations among investors that the offer would be raised.
Shares of Qualcomm were down more than 3 percent and those of Broadcom were up more than 2 percent in morning trading.