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Qualcomm officials have met with their counterparts at Broadcom to discuss their rival company’s $121 billion takeover proposal.
Qualcomm believe that Broadcom’s valuation falls way short and agreed to the meeting to allow Broadcom to explain its own valuation. Broadcom’s takeover advances made towards Qualcomm have been knocked back for the second time in just four months. After rejecting an original bid just before the end of the year, Qualcomm has sent back Broadcom’s revised $121 billion buyout offer.
Neither side commented on what transpired in the two-hour meeting. Qualcomm said in its statement its board would meet to determine its next steps. According to Reuters, Broadcom’s top executives left the meeting with the impression that ‘their Qualcomm counterparts listened to them but did not engage’.
Qualcomm had rejected Broadcom’s first unsolicited $103 billion acquisition offer in November, without engaging further. Qualcomm said Broadcom’s latest $82 per share offer, comprising $60 per share in cash and $22 per share in stock, ‘materially undervalues’ Qualcomm and falls short of the firm regulatory commitment it would demand. “If you are not willing to agree to do whatever is necessary to ensure a transaction closes, we will need you to be extremely clear and specific about exactly what actions you would refuse to take, so that we can properly evaluate the risk to Qualcomm’s shareholders,” Qualcomm’s Jacobs wrote to Broadcom’s Tan in a letter published by Qualcomm.
