After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty.
Reports emerged from Bloomberg on 6 November that chip giant Broadcom was on the verge of making a $130bn bid for Qualcomm, which would be the tech industry's largest technology takeover ever.
A week ago we reported that chipmaker Broadcom had offered to buy rival chipmaker and Apple supplier, Qualcomm for $130 billion. We are not sure whether Broadcom can initiate a proxy fight to get the deal approval from Qualcomm's board.
Qualcomm shares rose 0.8 percent, to $65.11, while Broadcom was off by 1 percent, at $262.24 a share, after the rejection announcement. It was also exploring the possibility of putting the decision in the shareholders' hands by nominating individuals to Qualcomm's board who would engage with negotiation talks.
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.
Both semiconductor companies did not immediately respond to requests for comment. Does it leave Qualcomm be or does it come back with an even larger and more tempting offer? Qualcomm, famous for inventing 2G and 3G wireless network technology, now sells the mobile chips for smartphones and the radios that enable cellular communications. Qualcomms stock closed at $64.57 a share on Friday, however the board of directors believes Broadcoms offer undervalues their company.
This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds. 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.