Published: Tue, November 14, 2017
Economy | By Melissa Porter

Now, now, Qualcomm... Don't play hard to get, grins Broadcom

San Diego-based Qualcomm is going to reject a $103 billion purchase offer made by rival Broadcom, according to a Reuters report.

The bid "significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects", Paul Jacobs, chairman and son of Qualcomm co-founder Irwin Jacobs, said in a statement.

As we said when the proposal was announced, it's likely that Broadcom also smelled blood in the water, because Qualcomm is now fighting a battle on multiple fronts, what with the ongoing dispute with Apple, the Federal Trade Commission (FTC) investigation, and other conflicts. Broadcom has told analysts and investors it could chop $3 billion from Qualcomm's expenses, boosting operating profit by about 30%.

ZDNet has reached out to Broadcom and will update if we hear more.

The rejection comes after Broadcom last week offered to swap each Qualcomm share for $70, including $60 in cash and $10 worth of Broadcom stock, and assume $25 billion in net debt.

The preparations for the board meeting indicate that Qualcomm is poised to rebuff the bid as insufficient as early as Monday, although it may decide to spend a few more days this week to prepare its full response to Broadcom, the sources added.

"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry".

"We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction", the company said. Broadcom's surprise bid for Qualcomm was announced a week ago and would have resulted in the biggest merger to date in the tech industry.

Qualcomm delivers chips to carrier networks to provide broadband and mobile data. If the deal goes through as proposed, it would be the largest technology acquisition ever.

Finally, it seems the board was concerned about a fight with regulators, even though Broadcom was willing to make some concessions to appease them.

Like this: