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Qualcomm rejects Broadcom's $103-billion takeover bid

Qualcomm rejects Broadcom's $103-billion takeover bid

Broadcomm, however, says it will stick with the touted package that, including debt relief and other terms, would see the biz spend $130bn in total.

Qualcomm has firmly rejected Broadcom's unsolicited offer to acquire the company, deeming the $130 billion offered as a "significant undervaluation". "Qualcomm's "thanks, but no thanks" response to the unsolicited bid by Broadcom isn't surprising and we would be surprised if at this point, Broadcom didn't move forward with a proxy fight", Loop Capital analyst Betsy Van Hees told Reuters.

Despite that, it seems that Broadcom's offer wasn't enough for Qualcomm's board of directors.

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"It is the Board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the Company's leadership position in mobile technology and our future growth prospects", said Qualcomm executive chairman and chairman of the board Paul Jacobs in a statement today.

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.

Steven Mollenkopf, Qualcomm Chief Executive, has been gathering feedback from the company's shareholders and finds Broadcom's $70-per-share offer is low-price, thus, it undervalues the company and does not price in the indecision associated with getting the bid approved by the regulators, the sources said. Qualcomm and Broadcom did not immediately respond to requests for comment. Qualcomm is already at the front of the pack when it comes to mobile chipmaking, and it stands to make a lot of money from that position as carriers begin to roll out 5G networks. The deal offered Qualcomm shareholders $60 a share, plus $10 in Broadcom stock for each share of Qualcomm. If the deal goes through as proposed, it would be the largest technology acquisition ever. Broadcom's (avgo) shares, up nearly 50% so far this year, were largely unchanged on Monday at $264.28.

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