Friday, 14 December, 2018

Qualcomm set to reject Broadcom's $103 bn takeover bid

Nellie Chapman | 13 November, 2017, 16:37

The deal - potentially the largest ever in tech and made a week ago - was unanimously rejected by Qualcomm's board because the offer "dramatically undervalues Qualcomm" and also faces "significant regulatory uncertainty".

A building on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited bid to buy peer Qualcomm Inc for $103 billion, in San Diego, California, U.S. November 6, 2017.

"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", Qualcomm executive chairman Paul Jacobs said in a press release.

Qualcomm also said in a statement that the bid did not take into account the regulatory hurdles involved in securing such a colossal deal.

The Broadcom offer is a 28% premium on Qualcomm stock's closing price on Thursday.

If completed at the current price, the combined companies would have had annual sales of $51 billion - trailing only Intel and Samsung in the semiconductor industry.

Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle.

Shares of Qualcomm were up 1 percent at US$65.25 in premarket trading, while those of Broadcom fell 0.7 per cent to US$263. Qualcomm's fiscal year ended in September and it typically holds its annual shareholder meeting in March.