Qualcomm rejects $130bn Broadcom offer, Broadcom poised to go hostile

Last week saw the possibility of one of the largest tech acquisitions ever, when Broadcom made a massive offer for Qualcomm — a deal which would’ve been valued at US$130-billion.

The unsolicited offer set the tech world alight, as a successful deal would’ve resulted in an even bigger, combined silicon juggernaut.

Yesterday, the US mobile tech firm has revealed its decision: a unanimous rejection by the board of directors.

“It is the board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, executive chairman and chairman of the board of Qualcomm, in a statement.

Does that translate to “we’ll maybe sell if the price is better”? It sounds like it, but the company’s later comments suggest that anti-trust barriers would also be in place.

Broadcom isn’t backing down after Qualcomm rejected an acquisition deal

“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” said Qualcomm CEO Steve Mollenkopf.

Qualcomm presiding director Tom Horton added that the board and management were “singularly focused on driving value” for shareholders.

“After a comprehensive review, conducted in consultation with our financial and legal advisors, the board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty,” Horton explained.

“We are highly confident that the strategy Steve and his team are executing on provides far superior value to Qualcomm shareholders than the proposed offer.”

Broadcom to increase offer?

Despite Qualcomm’s decision, Broadcom has stepped up the pressure, saying it “remains fully committed” to acquiring the mobile chip brand.

The company issued a press statement following Qualcomm’s decision, with CEO Hock Tan saying it was their “strong preference to engage cooperatively with Qualcomm’s board of directors and management team.

“We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction.”