Qualcomm rejects Broadcom's record-breaking $105 billion takeover attempt (AVGO, QCOM)

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USA chipmaker Qualcomm Inc is making preparations to reject rival Broadcom Ltd's $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles. Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal.

Qualcomm Chief Executive Steven Mollenkopf has spent the past few days soliciting feedback from Qualcomm shareholders, and feels that Broadcom's $70-per-share bid undervalues the company and does not price in the uncertainty associated with getting the deal approved by regulators, according to the sources.

"The Board and Management are singularly focused on driving value for Qualcomm's shareholders", Presiding Director for Qualcomm Incorporated, Tom Horton added.

Importantly, Broadcom didn't immediately up its bid for the competitor, and it isn't at all clear that Qualcomm is interested in satisfying Tan's "strong preference" of engaging cooperatively.


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. A combination with Broadcom would not have propelled it past industry leaders Intel and Samsung.

The sources asked not to be identified because the deliberations are confidential.

Neither company has commented on the report, but it wouldn't be shocking if Qualcomm held out.

Qualcomm, based in San Diego, rode the boom in mobile. Analysts have said a deal between the two would help Qualcomm settle its legal battle with the iPhone maker as Broadcom has a closer relationship with Apple.


Broadcom, a California-based semiconductor device supplier, gave Qualcomm the offer last week.

The company said its offer of 70 dollars per share represents a 28 percent premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 percent to Qualcomm's unaffected 30-day volume-weighted average price.

Qualcomm has a pending $28.1 billion deal with NXP Semiconductor that's under regulatory review in Europe. Qualcomm does not plan to significantly raise its price for NXP as a defensive strategy to make its acquisition by Broadcom more expensive, according to one of the sources.


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