Qualcomm rejects Broadcom’s buyout bid but offers to negotiate

This past Monday, Broadcom was willing to offer almost $121 billion in cash and stock to acquire Qualcomm. It didn't even take a week for the US chip company to decline Broadcom's offer. In a press release titled "Qualcomm board of directors unanimously rejects revised Broadcom proposal", the company does exactly that. That would seem to be the end of the story, given that Broadcom's most recent offer was its "best and final." It seems this tale isn't quite told yet, though—Qualcomm goes on to offer an in-person meeting with Broadcom's CEO Hock Tan to discuss the terms of a possible deal.

The aforementioned offer to meet with Broadcom's top brass comes in the form of a surprisingly frank public letter—signed by the chairman of Qualcomm's board of directors, Paul Jacobs—and says the purchase offer "raises more questions than it answers." Qualcomm notes that Broadcom's offer of $82 per share "materially undervalues" the company, which is much the same thing that Qualcomm said in response to Broadcom's initial offer.

As Jeff wrote late last year when Qualcomm initially rejected that proposal, the fused entity would be a monolithic presence with enormous influence over the telecommunications industry. Indeed, Qualcomm notes in its release today that the proposal "falls well short of firm regulatory commitment necessary given significant downside risk of a failed transaction." The release goes on to say that Broadcom's proposal is "inferior to [its] prospects as an independent company."

The letter goes on to request "clear, specific, and detailed answers" to a few questions, including the true highest price that Broadcom would be willing to pay, and whether Broadcom is prepared and willing to deal with the regulatory fallout the merger could incur. It will be interesting to see what Broadcom's response to the letter will be, and assuming the meeting takes place, what ends up being the final result.

Comments closed
    • ronch
    • 2 years ago

    Bottomline is this: “We want [b<]MOAR MONEY!!![/b<]"

    • BIF
    • 2 years ago

    Mergers suck. And they rarely (very rarely) result in long-term increased value. I vote “no”. Okay, I don’t get a vote, but I still vote “no”.

    • willmore
    • 2 years ago

    Is the next step after this fails for Broadcom to do a hostile takeover? It would cost less and they could get rid of the board of Qualcomm. So, that’s a plus.

    • chuckula
    • 2 years ago

    Don’t sell out to the MAN Qualcomm!

    Keep being that plucky small underdog we all know and love!

      • ronch
      • 2 years ago

      You must have mistaken Qually for AMD.

      • Srsly_Bro
      • 2 years ago

      THE TWO Ms REMAIN CHUCK. WHAT SHALL WE DO??

    • shank15217
    • 2 years ago

    This merger would be very bad for the consumer, creating the biggest patent troll of all time.

      • NTMBK
      • 2 years ago

      Broadercom

        • EzioAs
        • 2 years ago

        Hey, that’s my joke!!

        Darn it, I should’ve filed that for patent. Lesson learned.

          • DrCR
          • 2 years ago

          Nah, you have common law copyright. But good luck getting damages.

        • caconym
        • 2 years ago

        Quadcom. Camping the quad and getting all the frags.

      • ColeLT1
      • 2 years ago

      Rambus: hey, don’t forget about me

        • UberGerbil
        • 2 years ago

        Great, now I have a Simple Minds song stuck in my head.

          • Shobai
          • 2 years ago

          Oooh!! Is it [url=https://m.youtube.com/watch?v=mK6LVCj_dRY<]"The Signal and The Noise"[/url<] , off the new album?!

          • BIF
          • 2 years ago

          Oh crap, Simple Minds is still alive? Damn, I was just telling somebody they’re probably dead. Dammit, Siri, how come you don’t speak up on the truly important stuff?

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