Qualcomm Rising: Rejects Broadcom Bid for 'Significantly Undervaluing'

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Mobile chipmaker Qualcomm Inc on Monday rejected rival Broadcom Ltd's US$103-billion takeover bid, saying the offer "dramatically" undervalued the USA company.

Broadcom's proposal last week represented a 28 percent premium over the closing price of Qualcomm shares on November 2, but analysts were expecting Qualcomm the reject the $70-per-share bid. The Board has found that the proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty, said Tom Horton, presiding director for Qualcomm.

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. Another tactic Broadcom could use is to nominate directors for Qualcomm's board ahead of the company's annual general meeting in 2018. "ORCRP002286-topic.html" class="local_link" >Broadcom's unsolicited $103 billion bid as too low, setting the stage for a hostile proxy fight for control of the company.


Qualcomm provides chips to carrier networks to deliver broadband and mobile data. The per share consideration would consist of $60.00 in cash and $10.00 per share in Broadcom shares.

Qualcomm's shares have been weighed down by its nasty legal battle with Apple over patent royalties, fines from antitrust regulators and slow progress on its planned $38 billion acquisition of NXP Semiconductors. Broadcom has indicated it is willing to acquire Qualcomm irrespective of whether it closes the NXP deal.

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