Credit: Shutterstock photoQualcomm ( QCOM ) on Friday rejected the latest marriage proposal from suitor Broadcom ( AVGO ) following a Valentine's Day meeting, but remained open to having another date.
Qualcomm said Broadcom's purchase offer of $82 a share in cash and stock materially undervalues the wireless chipmaker and has an unacceptably high risk of failing regulatory approval. Broadcom's offer to buy Qualcomm is valued at about $121 billion and would be the largest-ever technology deal.
In a letter to Broadcom Chief Executive Hock Tan, Qualcomm Chairman Paul Jacobs said the deal is "not in the best interests of Qualcomm stockholders."
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Jacobs said Qualcomm's board of directors thought the meeting Wednesday between the two companies was constructive in that the Broadcom representatives expressed a willingness to agree to certain potential antitrust-related divestitures beyond those contained in their publicly filed merger agreement.
"While the current Broadcom proposal is unacceptable, our board is intensely focused on maximizing value for Qualcomm stockholders, whether through executing on its growth strategy or by selling the company," Jacobs said. "Our board is open to further discussions with Broadcom to see if a proposal that appropriately reflects the true value of Qualcomm shares, and ensures an appropriate level of deal certainty, can be obtained."
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On Nov. 6, Broadcom offered to buy Qualcomm for $70 a share in cash and stock. Broadcom upped that offer to the current $82 a share on Feb. 5, calling the deal its "best and final offer."
Broadcom hopes to persuade Qualcomm shareholders to accept its offer via a proxy battle at the company's March 6 annual meeting. Broadcom is seeking the election of six nominees to Qualcomm's board of directors, which would constitute a majority of Qualcomm's 11-person board.
Qualcomm shares were down 0.3%, near 65.10, in morning trading on the stock market today . Broadcom stock was down 0.9%, near 249.50.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
