Qualcomm Again Rejects Broadcom’s $150 Bn Acquisition Offer

As expected, Qualcomm on Thursday rejected the revised offer from Broadcom to acquire the Paul Jacobs led technology firm for $150 billion, saying the proposal is still undervalued.

“Qualcomm’s Board of Directors has unanimously rejected the revised non-binding, unsolicited proposal by Broadcom Limited to acquire all of the outstanding shares of Qualcomm for $82.00 per share ($60.00 in cash and $22.00 in Broadcom stock), which Broadcom announced on February 5, 2018,” the firm said in a statement.

Broadcom on February 5 had sent a revised offer to the San Diego based chipmaker with $82 per share valuation after its first offer of $70 per share was rejected in November 2017. In the new offer Broadcom, besides a raised valuation, had also invited Qualcomm Chairman Paul Jacobs to join the board of the new entity.

The Qualcomm Board, assisted by its financial and legal advisors, determined that the Broadcom proposal materially undervalues the chipmaker and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction.

Though Qualcomm has rejected the fresh offer there are chances the acquisition talk would still go on as the company has offered to meet Broadcom members to discuss on the same.

“The Board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction. However, the Board is committed to exploring all options for maximizing shareholder value, and so we would be prepared to meet with you to allow you to explain how you would attempt to bridge these gaps in both value and deal certainty and to better understand the significant issues that remain unaddressed in your proposal,” Qualcomm Chairman Paul Jacobs wrote in a letter.

In the letter addressed to Broadcom CEO Hock Tan, Jacobs wrote that his company will reach out to the former to schedule a metting.

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