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Qualcomm could reject Broadcom bid this week

Qualcomm could reject Broadcom bid this week”

Now that Broadcom has a $103 billion unsolicited bid on the table for fellow chip maker Qualcomm, the word from four people familiar with Qualcomm's thinking is that the San Diego based provider of Snapdragon mobile chips is going to turn down the deal.

Reportedly, Broadcom's offer of $70 per share, despite setting a record, "undervalues" Qualcomm and doesn't account for the potential regulatory hurdles involved in clinching such a huge deal.

Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle. Qualcomm's Board of Directors is rumored to have met today and there is speculation that the company will call the offer inadequate in an announcement to be made tomorrow. It can get dirty from here, with Broadcom hoping to choose its own directors for Qualcomm's board, and if shareholders wants a deal, they can vote in new board members and force Qualcomm to negotiations. Although it remains unclear the time Broadcom would decide to execute such move.

Neither company has commented on the report, but it wouldn't be shocking if Qualcomm held out.

NXP shares have been trading above Qualcomm's bid price, as many NXP shareholders, including hedge fund Elliott Management Corp., have been holding out for a better price. Qualcomm does not plan to significantly raise its price for NXP as a defensive strategy to make its acquisition by Broadcom more expensive, according to one of the sources.

On Friday, Qualcomm shares concluded at $64.57, while Broadcom finished at $264.96.



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