Economy

Qualcomm rejects Broadcom acquisition bid

Qualcomm rejects Broadcom acquisition bid”

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.

However, Qualcomm needs to decide if it's open to accept Broadcom's offer.

For now, Broadcom said it remains " fully committed" to going ahead with the purchase.

"The Board and Management are singularly focused on driving value for Qualcomm's shareholders", Presiding Director for Qualcomm Incorporated, Tom Horton added. "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 also said its proposal stands regardless of whether Qualcomm's pending acquisition of NXP closes under its current terms or is nixed.

"We have received positive feedback from key customers about this combination", CEO Hock Tan said in a company release. Today's Broadcom is the product of a $37 billion combination in 2016 between Avago, a Singapore-based company that was once part of a former unit of pioneering PC maker Hewlett-Packard, and Broadcom, another company with origins in Southern California which made chips for tablets, smartphones and other telecom and cable applications. However, according to sources it's likely to reject the offer according to sources, as it doesn't feel it's representative of the value of the company or the people in it.

Tan, who has built Broadcom through a series of transactions that have helped reshape the US$300 billion semiconductor industry, has previously been able to pull off deals with friendly approaches. That being said, all of this could be decided as early as next week, with Qualcomm's board of directors reportedly planning on meeting on Sunday to review the offer and come up with a strategy.

Chief executive Steve Mollenkopf added that Qualcomm's achievements to date have offered significant value to stockholders.

"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", said Paul Jacobs, executive chairman and chairman of the board of Qualcomm, as cited in a company press statement.



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