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News Worms


$130 billion isn't enough for Broadcom to take over Qualcomm

$130 billion isn't enough for Broadcom to take over Qualcomm

Qualcomm does not plan to considerably increase its price for NXP as a defensive strategy to make its acquisition by Broadcom more costly, one of the sourced said.

"Broadcom's $70 bid and Qualcomm's rejection as a positive indicator that Qualcomm's licensing business remains undervalued and both companies believe Qualcomm can resolve its licensing issues with Apple and another leading OEM", writes Walkley. The board meeting's preparations show that Qualcomm is set to reject the bid as inadequate as early as Monday, although it may extend to a few more days to ready its full response to Broadcom, the sources added.

"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, Qualcomm's chairman of the board, said in a statement.

"Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company", said Hock Tan, President and Chief Executive Officer of Broadcom at the time.

ZDNet has reached out to Broadcom and will update if we hear more. Keep in mind, this offer from Broadcom wasn't solicited, so it isn't as if Qualcomm and Broadcom were in talks about a merger before Broadcom plopped its $130 billion bid on the table.

In an email, a Qualcomm spokesperson said the company "won't have any comment beyond this statement". If Broadcom makes a hostile bid, Qualcomm's governance rules would allow the rival to submit its own slate for the entire 11-member board by the December 8 nomination deadline. They also stated that Broadcom "undervalues" them.

Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.

As of 1650 GMT, Qualcomm shares were up 1.78% to $65.72 each and Broadcom had posted a 0.24% uptick to $265.61 per share. That's no small amount of money, and it would have ranked as the tech industry's largest acquisition ever.

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