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Qualcomm to meet Broadcom to demand more after rejecting $121 bn bid

Qualcomm Snapdragon 636 mobile platformBroadcom has received a request for a meeting from Qualcomm board though its $121 billion revised proposal for buying at $82 per share ($60 in cash and $22 in Broadcom stock) was rejected by the US-based chipset company.

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Qualcomm chairman Paul E Jacobs has sought a meeting with Broadcom CEO Hock Tan to discuss further on the bid price and challenges in closing the multi-billion deal. This is the first time that Qualcomm sought a meeting with Broadcom after the Singapore-based chip maker offered an unsolicited bid to buy Qualcomm.

Broadcom on February 5 also offered two board positions to Qualcomm persons in the Broadcom board after closing the deal. Before that, Broadcom was looking for replacing the entire 12 member Qualcomm board with Broadcom’s people. Qualcomm’s annual general meeting will be held in March.

Qualcomm said the revised proposal from Broadcom undervalues Qualcomm and falls short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction.

Qualcomm chairman Paul E Jacobs in a letter to Broadcom CEO Hock Tan said the proposal ascribes no value to NXP acquisition, no value for the expected resolution of its licensing disputes and no value for the significant opportunity in 5G.

“Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector,” Paul E Jacobs said in the letter.

On November 13, 2017, Qualcomm rejected Broadcom’s proposal to buy Qualcomm for $70 per share ($60 in cash and $10 in Broadcom stock).

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