Broadcom remains in the hunt for Qualcomm, and it's willing to pay quite a bit more than its initial $105 billion offer for the company from back in November. This morning, the acquisition-hungry chip designer released a revised bid for Qualcomm of $82 per share, up from $70 last year. Given Qualcomm's roughly 1.5 billion outstanding shares, the new offer values the company at about $120.8 billion. With $25 billion of net debt from Qualcomm in the bargain, the total value of the deal rises to about $146 billion.
Broadcom notes that this new offer is a 50% premium over Qualcomm's share price on the last day those shares were unaffected by knowledge of Broadcom's offer and a 56% premium on Qualcomm's "unaffected 30-day volume-weighted average price." The extra dosh comes out to $60 in cash per Qualcomm share and the remainder in Broadcom shares. Broadcom's $70 initial offer comprised the same amount in cash plus $10 per share in Broadcom stock.
On top of the top-line pot sweetening, Broadcom says it's willing to pay a "ticking fee" that would pay out more cash to Qualcomm shareholders if the deal takes more than a year to close once the companies enter into a definitive agreement. Broadcom will also dangle a "reverse termination fee" that would compensate Qualcomm stakeholders if the deal were to collapse for regulatory reasons. The company is also extending board-of-directors seats to longtime Qualcomm exec Paul Jacobs and one other current Qualcomm board member in the combined company's boardroom. To press its case, Broadcom has put together an investor presentation that lays out the nitty-gritty of why it believes its offer is compelling.
Broadcom says this offer is its "best and final" proposal. Qualcomm's board of directors has confirmed receipt of the revised offer and says it plans to review the document in accordance with its fiduciary duties. The Qualcomm board rejected Broadcomm's prior offer, complaining that it "dramatically [undervalued]" the Snapdragon designer and came with too much regulatory uncertainty. We'll see whether Broadcom's freshened offer is enough to make the Qualcomm board cave.