Broadcom willing to talk with Qualcomm about 'best and final' takeover offer

Qualcomm has struck a new deal with Samsung which could help the mobile chip firm wave goodbye to its antitrust case in South Korea.

But the question of when still remains.

Qualcomm's board of directors has unanimously rejected Broadcom's acquisition offer, the company announced this Thursday.

Back in November, Broadcom announced that the company wanted to acquire one of its rivals in the semiconductor space, USA chipmaker Qualcomm.

Broadcom said on Monday its improved offer was premised on either Qualcomm acquiring NXP Semiconductors NV at the current disclosed terms of $110 per share in cash, or the $38 billion transaction being terminated. In the filing, Broadcom CEO Hock Tan writes to Qualcomm executive chairman Paul Jacobs that he was "astonished" Qualcomm did not accept a weekend meeting to discuss a potential merger.

"[Broadcom's] proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector".

Tan expressed astonishment at his company regarding Qualcomm not willing to meet until Tuesday.

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Broadcom on February 5 raised its bid for Qualcomm to $121 billion and called it Broadcom's "best and final" offer. Broadcom responded by attempting to oust Qualcomm's board, nominating 11 candidates ahead of the election at the company's annual general meeting on 6 March.

In its rebuttal, Qualcomm said the bid "materially undervalues" the company-though it is the largest big the tech industry has ever seen.

In addition, the proposal "falls well short of the firm regulatory commitment the board would demand given the significant downside risk of a failed transaction", Qualcomm said.

Furthermore, Qualcomm's acquisition of NXP that would give the former an opening to other markets, is still in process.

Notably, some major Chinese smartphone manufacturers have expressed concerns about the deal due to Broadcom's track record of cutting spending on research and raising chip prices.

However, for the deal to happen, just a nod from Qualcomm is not enough.

"Given Qualcomm's broken promises, should investors believe Qualcomm can accurately project two years forward?", Broadcom said in its pitch to shareholders.

  • Darren Santiago