Current information from sources close to Qualcomm suggests that the San Diego based chipmaker is set to reject an unsolicited $103 billion bid from fellow chipmaker, Broadcom. To make the deal lucrative, Broadcom stated that Qualcomm stockholders will get $60 in cash and $10 in Broadcom stock for every share of Qualcomm. This offer is a 28% premium from Qualcomm’s closing stock price a day before the rumored bid surfaced.
As of now, there are reports that Qualcomm’s Board of Directors have met and an agreement has been reached that the deal is inadequate. However, sources say that Broadcom plans to stimulate Qualcomm’s next stockholder’s vote. Nevertheless, this will be a very rigorous and expensive way to go about this deal. It will be much easier if Brodacom simply raise its bid to entice Qualcomm.
Deals like this are much complicated because even if Qualcomm agrees to a deal, the stockholders of both firms and regulatory agencies would also have to ratify the deal. Meanwhile, Qualcomm has been trying to acquire NXP Semiconductors NV for $38 billion. However, Broadcom has said that it will not significantly raise its bid if Qualcomm finally closes the NXP Semiconductors NV deal. Qualcomm is currently at the hub of numerous lawsuits and it appears that this pending takeover is a perfect distraction for Qualcomm stockholders.