Qualcomm Rejects Broadcom Offer to Buy the Company for $105 Billion

Casey Dawson
November 16, 2017

US chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.

The US microchip giant Qualcomm has rejected a $130bn (£99bn) takeover offer from Broadcom, setting the stage for its industry rival to return with an even bigger offer.

Qualcomm has officially rejected the US$105 billion (about RM 440 billion) takeover offer from Broadcom.

The deadline is December 8 for Broadcom to submit a slate of alternative candidates to Qualcomm's 11-member board of directors to push the deal through. That's all without touching on Qualcomm's current legal spat with Apple, too, which might throw a wrench into some of these plans. The BOD believes that Broadcom's offering undervalues Qualcomm and its growth perspectives in the upcoming 5G era.

It's not clear how Broadcom will respond. Broadcom is so interested that it sent an unsolicited acquisition offer to Qualcomm last week.

"Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal".

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Qualcomm provides chips to carrier networks to deliver broadband and mobile data.

Regulators are already scrutinizing Qualcomm's $38-billion acquisition of automotive chipmaker NXP Semiconductors NV. Under the terms of the deal, shareholders of Qualcomm would get $60 in cash and $10 in Broadcom's stock for each share, which would be a 28% premium over the price of a Qualcomm share on November 2, 2017.

Broadcom has indicated it is willing to buy Qualcomm irrespective of whether it closes the NXP deal.

Tan brought up combining the two companies with Qualcomm in August 2016, when Qualcomm's shares traded at significantly higher prices.

Qualcomm no longer has a poison pill - a tactic to make shares of the company's stock look unattractive or less desirable to the acquiring firm - in its bylaws to deter potential suitors.

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