Finance

Qualcomm to meet Broadcom to demand more after the revised bid

Qualcomm to meet Broadcom to demand more after the revised bid

"Broadcom has long sought a meeting to discuss Broadcom's acquisition of Qualcomm".

But the question of when still remains.

Qualcomm's board unanimously rejected Broadcom's original offer, worth about $105 billion, last November.

But he said the $82 per share bid remained Broadcom's "best and final offer". Qualcomm's Jacobs notes in his missive, that if his company agrees to be purchased by Broadcom and USA regulatory agencies block the deal from going through "Qualcomm would be enormously and irreparably damaged".

"Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector", wrote the Qualcomm chairman. Alternatively, Qualcomm may terminate the deal, which is also an option stipulated in Broadcom's acquisition offer.

Tan expressed astonishment at his company regarding Qualcomm not willing to meet until Tuesday. Broadcom earlier this week said the deal was its "best and final" offer and one that CEO Hock Tan told the New York Times "any rational board would consider".

Qualcomm shareholders will be voting on March 6th whether to replace its board with Broadcom's nominees.

It can be said that Qualcomm is definitely not convinced that the value-add the company made after acquiring NXP Semiconductor is not being appreciated by Broadcom.

Yesterday, February 8, Qualcomm said that this offer indicates "materially" undervaluing them, and it "falls well short of the firm regulatory commitment" required for approval of the transaction.

Simply put, Qualcomm opines that eventually, it be valued much higher than $121 billion in the stock market.

According to the FT, the deal will also likely fend off a hostile takeover bid from semiconductor giant Broadcom. "Following Qualcomm's announcement today that it is willing to meet with us, we offered to meet with Qualcomm on Friday, Saturday or Sunday". Another hold-up comes in the form of activist NXP shareholders resistant for the deal and are asking for a higher price. NXP shares closed at $115.94 on Thursday, indicating investors were expecting a sweeter deal.

KitGuru Says: The Broadcom/Qualcomm proposal has a huge set of challenges to overcome and ultimately, may not be possible.


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