Published: Tue, November 14, 2017
Sci-tech | By Jackie Newman

Qualcomm denies $130bn rival takeover

Qualcomm denies $130bn rival takeover

When reports first surfaced about the offer, it was known that Qualcomm wasn't happy with the deal. Qualcomm announced today it has rejected Broadcom's takeover bid, and for now, it will remain subsidiary to no one.

"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", Qualcomm's presiding director Tom Horton said.

Qualcomm has a message for its prospective buyer: Sorry, but we're worth more than you think. "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 Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.

San Diego-based Qualcomm said the bid undervalues the company's position in thriving areas in the semiconductor industry like mobile, "internet of things", automotive, edge computing and.

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Analysts expect Broadcom to raise its $105 billion bid that it made last week after Qualcomm said Monday that it had rejected the unsolicited $70 per-share offer. At the time, Broadcom said that it was prepared to offer as much as $130 billion dollars to take control of Qualcomm.

Both semiconductor companies did not immediately respond to requests for comment. Qualcomm, famous for inventing 2G and 3G wireless network technology, now sells the mobile chips for smartphones and the radios that enable cellular communications. If Broadcom makes a hostile bid, Qualcomm's governance rules would allow the rival to submit its own slate for the entire 11-member board by the December 8 nomination deadline.

The company's decision to decline what would be the biggest-ever tech deal simply opens the door for the inevitable proxy battle that will ultimately decide the fate of the chipmaker. Amid all the fighting with Apple, and accompanying loss of revenue, Qualcomm's shares had fallen 20% this year through late October to $51 before rumors of Broadcom's interest leaked.

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