Is Qualcomm Slipping Away From Paul Jacobs’ Clutches?

Seems like Qualcomm is slipping away from Paul Jacobs’ clutch. On 14th February the board of Qualcomm met their counterparts of Broadcom and the crux of the story is the San Diego based chip maker is slowly getting ready to hand over its baton to the other chip maker.

Before the meeting on 14th, Qualcomm’s board members had unanimously rejected the second and revised take over bid from Broadcom but was ready to meet to discuss.

In the meeting Qualcomm clearly informed the proposed buyer that the $82 per share is not the right valuation for the world’s largest chipmaker of smart devices and its no way at the best interest for the company’s stakeholders. At the same time Broadcom also told Qualcomm that the valuation is best and the final offer from its side.

So, what does that mean? Does that mean the deal is not going to cut the ice? I do not think so.

“That said (the stalemate of each not agreeing to the valuation), our Board found the meeting to be constructive in that Broadcom representatives expressed a willingness to agree to certain potential antitrust-related divestitures beyond those contained in (your) publicly filed merger agreement,” writes Qualcomm Chairman of the Board Paul Jacobs in a letter to Broadcom CEO Hock Tan.

The statement makes a lot of sense, and that too, at a time when Broadcom has clearly offered its ‘final offer’. It seems both the parties are willing to blink at the same time. At least Qualcomm has hinted so.

“While the current Broadcom proposal is unacceptable, our Board is intensely focused on maximizing value for Qualcomm stockholders, whether through execution its growth strategy or by selling the ‘company’,” Jacobs writes.

A hint can not be any clearer.

“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,” he adds in the letter.

In November when Broadcom had offered $60 per share in its first acquisition bid, Qualcomm, though had rejected the offer, had also hinted that its under valued. Broadcom then revised its offer to $82 per share and said its the company’s final offer. The second offer was also rejected but Chairman Paul Jacobs had offered to meet Broadcom.

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