Qualcomm rejects $130bn Broadcom takeover bid

by Antonio Miles November 16, 2017, 2:05
Qualcomm rejects $130bn Broadcom takeover bid

Qualcomm's board of directors could meet as early as Sunday to review the unsolicited acquisition offer and decide on its strategy, the sources said.

A sign on the Qualcomm campus is seen in San Diego, California, U.S. November 6, 2017.

Qualcomm shares closed at $64.57 on Friday, while Broadcom ended at $264.96. "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", added Qualcomm CEO Steve Mollenkopf.

Both companies count Apple among their top customers. It doesn't appear Qualcomm was eager to accept the unsolicited offer, however, as the chip maker's board of directors has now unanimously rejected Broadcom's proposal. But Qualcomm is understood to view it as an opportunistic swoop, coming as the company is under threat from regulatory lawsuits and locked in a spat with Apple.

QCOM shares traded as high as $80 just a few years ago, so it makes sense that the company wouldn't be ecstatic with a $70 takeover offer.

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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. Broadcom is said to be considering a proxy contest, asking Qualcomm stockholders to vote on replacing the latter's current board with a slate of candidates put up by Broadcom.

"We are well-advised and know what our options are, and we have not eliminated any of those options", Broadcom Chief Executive Hock Tan told Reuters last week.

Any deal would face scrutiny from the antitrust regulators as the combined company would own the high-end WiFi business globally, analysts said. Qualcomm has more, including the soon to finish NXP acquisition, a great patent portfolio, high-end phone SoC leadership, Modem and WiFi leadership in 4G and 5G and even automotive, the world's first 10nm server and Windows 10 holding great Snapdragon potential.

Broadcom has indicated it is willing to buy Qualcomm irrespective of whether it closes the NXP deal.


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