Emerson Emerges as Suitor for NI, but NI Appears Uninterested; $48 FVE Assumes 50% Chance of Deal

We raise our fair value estimate for narrow-moat National Instruments to $48 per share from $43, as wide-moat Emerson Electric has emerged as a suitor for to buy NI with a cash offer of $53 per share. We assign a 50% probability of a deal going through at $53 per share, with 50% probability that a deal falls through with our $43 standalone fair value estimate remaining intact. This offer comes after NI’s announcement last week that it is conducting a strategic review, likely in order to attract another suitor and/or an even higher offer price.