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Qualcomm Rejects Broadcom's Latest Acquisition Offer, But Leaves Door Open

Qualcomm’s board of directors today unanimously rejected Broadcom’s revised bid to acquire the company for $121 billion. Qualcomm’s board continues to insist that Broadcom is undervaluing Qualcomm’s overall worth. Further, Broadcom has not explained how it will address the potential loss of shareholder value should the acquisition fail. However, Qualcomm said its board of directors is open to meeting with Broadcom’s board to discuss the offer and how Broadcom might “bridge these gaps in both value and deal certainty.” Specifically, Qualcomm want’s to know “the true highest price” that Broadcom might be willing to pay. Broadcom initially offered $60 per share, but raised the bid to $82 per share. Further, Qualcomm says the offer doesn’t account for Qualcomm’s in-progress acquisition of NXP, which would add value to the company. Qualcomm called Broadcom’s proposal “inferior relative to our prospects as an independent company.” Qualcomm also wants to know that Broadcom is “willing to commit to take whatever actions are necessary to ensure the proposed transaction closes.” For example, Broadcom will need to demonstrate that it can help the deal clear shareholder and regulatory hurdles, not to mention account for the differences in the two firms’ business models. Qualcomm said other questions for Broadcom would be on the table, though it declined to specify what they might address. Broadcom first made an offer for Qualcomm in November 2017 and revised its offer earlier this week.


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