Qualcomm: Broadcom's $105bn bid "significantly undervalues" us

Rodiano Bonacci
Novembre 14, 2017

Meanwhile, Tom Horton, presiding director for Qualcomm, said: "The Board and Management are singularly focused on driving value for Qualcomm's shareholders".

Calling the bid unsolicited, Qualcomm claimed the acquisition offer - worth £80 billion - doesn't reflect its achievements or future plans.

Qualcomm, Inc. (NASDAQ: QCOM) announced that its Board of Directors unanimously rejected the unsolicited proposal announced by Broadcom Ltd (NASDAQ: AVGO), stating, "It is the Board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm".

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

According to Reuters, Broadcom could increase its offer to up to $90 per share. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G".

Reports emerged from Bloomberg on 6 November that chip giant Broadcom was on the verge of making a $130bn bid for Qualcomm, which would be the tech industry's largest technology takeover ever. The deal would dwarf Dell Inc.'s $67 billion acquisition of EMC in 2015 - then the biggest in the technology industry.

The deal will comprise $70 a share in cash and stock for the business, although it's been valued at a mammoth $130 billion, including $25 million debt.

The rebuff ratchets up pressure on Broadcom to sweeten its offer, or embark on a proxy battle, which carries its own risk of rejection by shareholders.

The combined business would instantly become the default provider of a set of components needed to build each of the more than 1 billion smartphones sold every year.

Tan said he's pleased with the reaction he's already received from Qualcomm shareholders and customers regarding his proposal and would prefer to keep the negotiations friendly.

"This transaction will create a strong, global company with an impressive portfolio of industry-leading technologies and products, and we have received positive feedback from key customers about this combination", Broadcom CEO Hock Tan said in a prepared statement. 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.

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