Qualcomm board rejects Broadcom proposal

15 February, 2018, 03:15 | Author: Simon Thompson
  • Broadcom offers $8 bn to Qualcomm if deal is blocked

Ironically, Qualcomm and Broadcom will meet this Wednesday, February 14th, which is Valentine's Day.

Qualcomm's stock closed at $65.66 on Monday, well below the Broacom's offer of $82 per share.

Qualcomm has told Broadcom that it has rejected its "best and final offer" of $121 billion because of several factors.

In a filing that followed up on its letter to Broadcom chief executive Hock Tan on Thursday rebutting his latest offer, the San Diego-based company laid out more detail on its reservations about the deal.

When offering the revised proposal, Broadcom said it was willing to sell two Qualcomm businesses - Wi-Fi networking processors and RF Front End chips for mobile - to resolve antitrust problems.

Broadcom (NASDAQ:AVGO) has secured as much as $100B of debt financing for its attempted takeover of Qualcomm (NASDAQ:QCOM), WSJ reports.

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The concerns include the risk of not receiving regulatory approval, disruption to Qualcomm's business operations and, strikingly, a reference to two billion-dollar customers who stated that they would take their designs elsewhere if the deal was approved. Recommendations made by these firms could lead funds holding millions of Qualcomm shares to vote in favor of the current board, or to vote for the slate nominated by Broadcom. It was a bump from the initial offer of $70 per share in November, which Qualcomm balked.

The meeting follows yet another refusal from Qualcomm after Broadcom upped its offer from $103 billion Dollars on February 5th.

"We urge you to meet with us without further delay, and stand ready to meet this Saturday or Sunday in NY or another mutually convenient location", Tan said in a letter to Qualcomm chairman Paul Jacobs.

In his letter, Jacobs went on to discuss how Broadcom's offers have undervalued the firm.

"T$3 he Board is committed to exploring all options for maximizing shareholder value, and so we would be prepared to meet with you to allow you to explain how you would attempt to bridge these gaps in both value and deal certainty and to better understand the significant issues that remain unaddressed in your proposal".

Thoughts about Qualcomm rejecting Broadcom's offer?



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