Qualcomm rejects Broadcom’s increased offer of $121 billion USD

Qualcomm’s board has unanimously rejected Broadcom’s increased acquisition offer of $121 billion USD.

In a press release that contained Qualcomm’s letter of rejection to Broadcom, the company stated that the proposal “materially undervalues” the business and falls short of the firm regulatory commitment the board would demand “given the significant downside risk of a failed transaction.”

However, Qualcomm noted that it has offered to meet with Broadcom to “see if it can address the serious deficiencies in value and certainty in its proposal.”

In the meeting, Qualcomm says it would expect answers to two key questions: “What is the true highest price at which you would be prepared to acquire Qualcomm? Is it $82 per share or is it higher?” and “Is Broadcom willing to commit to take whatever actions are necessary to ensure the proposed transaction closes?”

When it put forward the offer on Monday, February 5th, Broadcom called the $121 billion deal its “best and final offer.” It would be the largest tech acquisition in history if accepted.

The offer was increased from the original November proposal of $103 billion USD. Though the deal will likely face issues with regulatory approval, Broadcom says it its willing to sell two Qualcomm businesses — Wi-Fi networking processors and RF Front End chips for mobile — to resolve antitrust problems. Broadcom also says it’s willing to pay Qualcomm a fee if the transaction is not completed within its target of 12 months, or a “reverse termination fee” if regulators nix the deal.

Shortly after Qualcomm first rejected the offer, Broadcom made a slate of board of director nominations in attempt to launch a hostile takeover. Qualcomm has repeatedly asked stockholders to vote for the company’s own nominees at the annual stockholder meeting on March 6th.

Source: Qualcomm