Qualcomm rejects Broadcom’s revised takeover

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.

However, it might not be the end of the road for Broadcom, with Qualcomm hinting that one more bid may just do it. However, Broadcom had earlier stated that this was the ‘best and final’ offer that it was prepared to make. According to Reuters, Qualcomm has suggested a meeting with Broadcom execs to see if they can hammer out what it calls the bid’s ‘serious deficiencies in value and certainty’. The proposed meeting has been pencilled in for Tuesday next week, with both companies set to speak with their respective advisors over the weekend. “We hope that your willingness to meet with us reflects Qualcomm’s genuine intent to reach an agreement with respect to our February 5 proposal,” Broadcom CEO Hock Tan told Qualcomm Executive Chairman Paul Jacobs.

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.

Qualcomm shares were up 1.1 per cent at $63.12 in after-hours trading on Thursday. Broadcom shares were up 1 per cent at $232.00.