National Instruments picks Fortive, Keysight as challengers to Emerson's bid -sources

By David Carnevali, Milana Vinn and Anirban Sen

(Reuters) - Measurement equipment maker National Instruments Corp has decided that Fortive Corp and Keysight Technologies Inc have the potential to top Emerson Electric Co's $7 billion bid for the company, three people familiar with the matter said.

National Instruments this week informed Emerson, Fortive and Keysight -- which are all providers of automation solutions facilitating manufacturing in various industries -- that their offers qualify them to go through the second round of bidding for the company, the sources said.

National Instruments put itself up for sale in January after Emerson threatened to challenge its board if it did not engage in deal negotiations. Emerson dropped that threat once the sale process for National Instruments got underway.

The value of the first-round bids could not be learned and it is unclear if National Instruments will, by the end of the process, receive an offer it deems superior to Emerson's $53-per-share all-cash bid, or whether Emerson will revise its offer. National Instruments ended trading on Thursday at $50.62 a share.

National Instruments expects the sale process to be completed by early April, according to the sources.

Another bidder could yet emerge, the sources said, requesting anonymity because the matter is confidential. National Instruments, Fortive and Keysight did not immediately respond to requests for comment. Emerson declined to comment.

Austin, Texas-based National Instruments specializes in the production of automated testing and measurement tools for the semiconductor, transportation, aerospace and defense industries.

Emerson has been involved in a string of deals over the last few years to reshape itself into a provider of industrial automation products and services. Fortive, an industrial conglomerate, and Keysight, an instrumentation company, have also been looking for acquisitions in the test and measurement sectors.

(Reporting by David Carnevali, Milana Vinn and Anirban Sen in New York, editing by Deepa Babington)