Qualcomm board rejects Broadcom's $100 billion takeover bid

Doris Richards
November 14, 2017

"It is the board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects", Paul Jacobs, executive chairman and chairman of the board of Qualcomm.

Qualcomm announced late last night that its board of directors had "unanimously rejected" Broadcom's record-breaking offer, having agreed that the $70 per share bid "dramatically undervalues Qualcomm" and "comes with significant regulatory uncertainty".

The company's CEO, Steve Mollenkopf, added that "no company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry".

"We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction", Broadcom CEO Hock Tan said.

Broadcom has also been deliberating the possibility of raising its bid for Qualcomm, including through more debt financing, some of the sources said, although it was not clear when Broadcom would choose to make such a move.

Reports emerged from Bloomberg on 6 November that chip giant Broadcom was on the verge of making a $130bn bid for Qualcomm, which would be the tech industry's largest technology takeover ever.

The rebuff ratchets up pressure on Broadcom to sweeten its offer or embark on a proxy battle, which carries its own risk of rejection by shareholders. In fact, if the deal goes ahead it would probably the biggest in the technology industry's history, worth more than Dell's purchase of EMC in 2015, which was valued at $67 billion.

The combined business would instantly become the default provider of a set of components needed to build each of the more than 1 billion smartphones sold every year.

GGP said its Board has formed a special committee to carefully review and consider the proposal and pursue the course of action that it believes is in the best interests of its shareholders. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination".

Broadcom restated its intention to get Qualcomm to come to terms, noting that its previous offer-which consisted of $60 in cash and $10 in Broadcom stock per share-marked a 28% premium over the closing price of Qualcomm's shares on November 2, the last day to have been unaffected by media speculation of a deal.

Other reports by Iphone Fresh

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