Yesterday, we reported that Qualcomm was set to reject a $103bn bid by fellow chipmaker Broadcom. Now, an announcement has been made last night and the Qualcomm’s board of directors declared that it had rejected Broadcom’s offer of $130bn ($ 105bn in cash + shares and $ 25bn in debt) because the value was underestimated.
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However, Broadcom CEO, Hock Tan, said
“We still think the proposed offer is the most attractive for Qualcomm shareholders, and we are also encouraged by their response, many of whom have been expressed to our shareholders. We hope QUALCOMM will discuss with us the intention of the offer, and we still have a strong desire to cooperate with Qualcomm’s board of directors and management”
As a deal that may become the largest in the technology industry, Broadcom’s acquisition of Qualcomm will certainly not be a smooth process, as it will have to go through two board and shareholders’ endorsements, antitrust audits in the country, management/client/employee inputs and other complex processes. Not to mention approval by regulatory agencies. At present, Broadcom’s share price is about four times less than Qualcomm. Although Qualcomm is currently faced with numerous lawsuits, this deal seems most unlikely, however, the coming weeks will reveal if there is any hope for this deal.