CSR accepts £1.56bn cash bid from Qualcomm

US smartphone chipmaker Qualcomm has agreed a 900p-per-share cash takeover of CSR, valuing the London-listed semiconductor company at £1.56bn.

The offer price represents a 36% premium to Tuesday's closing price and 56.5% when compared to the value of CSR's shares on 27 August, when the British firm announced it had received and rejected a bid from Microchip Technology.

Arizona-based Microchip Technology was in September given an extension of the usual offer period to 15 October to make its play, but Nasdaq rival Qualcomm has now seemingly usurped it.

Broker Liberum said the offer was a "good price" and that it expected the deal to go through without a counter offer as CSR had been on the block for the last month.

The fact that the acquiror has changed suggests this is the culmination of a competitive process and that counter bids are unlikely at this stage, Numis analysts added.

CSR directors, advised by JP Morgan Cazenove and Goldman Sachs, have approved the acquisition terms and intend unanimously to recommend that shareholders vote in favour of the deal.

In August the FTSE 250-listed group, formerly known as Cambridge Silicon Radio, rejected an approach from Microchip Technology, although the offer price was not stated.

Liberum's analysts said Qualcomm's price corresponds to 25.5 times 2015 earnings, 2.66 times enterprise value/sales and 3% free cash flow.

Ron Mackintosh, chairman of CSR, said: "While the CSR directors believe that CSR is now strongly positioned to execute its strategy of delivering growth and sustainable returns in the medium and long term, we believe that the offer from Qualcomm provides CSR shareholders with an immediate and certain value which is highly attractive."

He added: "The board believes this represents a very attractive outcome for CSR shareholders, customers and employees."

Numis noted that the main conditions to the transaction are shareholder approval, regulatory approval and anti-trust clearance.

"Qualcomm has agreed to use reasonable endeavours to implement the acquisition and satisfy anti-trust clearances. We do not believe that there should be any anti-trust issues as CSR currently operates in largely different markets from Qualcomm."