16 November, 2017
The technology sector's largest takeover ever has been denied after chipmaker Qualcomm rejected a $130bn (€111.43bn) buyout offer from Broadcom.
If Broadcom makes a hostile bid, Qualcomm's governance rules would allow the rival to submit its own slate for the entire 11-member board by the December 8 nomination deadline.
Last week Broadcom offered to buy all of the outstanding shares of Qualcomm for $105 billion in total for cash and stock. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", said Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.
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.
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Like Qualcomm, Broadcom is a major supplier of parts of Apple products. In a statement today the board said the offer "dramatically undervalues Qualcomm" and is "not in the best interests of shareholders".
Broadcom has also been deliberating the possibility of raising its bid for Qualcomm, including through more debt financing, some of the sources said, although it was not clear when Broadcom would choose to make such a move. Qualcomm has more, including the soon to finish NXP acquisition, a great patent portfolio, high-end phone SoC leadership, Modem and WiFi leadership in 4G and 5G and even automotive, the world's first 10nm server and Windows 10 holding great Snapdragon potential.
Despite being a very, very large offer, Qualcomm believes they're in an excellent position in the growing internet-connected market. Broadcom has indicated it is willing to acquire Qualcomm irrespective of whether it closes the NXP deal.
Shares of Qualcomm have been declining in value in the recent quarters, which is why Broadcom made its proposal.