Broadcom hones focus on Qualcomm after takeover deal rejected

Qualcomm tells Broadcom Offer 'dramatically undervalues' the company

Qualcomm tells Broadcom Offer 'dramatically undervalues' the company

Qualcomm announced Monday that it has rejected rival chipmaker Broadcom's acquisition offer of 70 US dollars per share, saying the bid price was too undervalued to be accepted.

The company said its offer of 70 dollars per share represents a 28 percent premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 percent to Qualcomm's unaffected 30-day volume-weighted average price.

Calling the bid unsolicited, Qualcomm claimed the acquisition offer - worth £80 billion - doesn't reflect its achievements or future plans.

"The board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty", Qualcomm presiding director Tom Horton said in a statement. "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".

The San Diego-based chipmaker announced on Monday that it was passing on the acquisition, which Broadcom actually valued at $130 billion taking Qualcomm's $25 billion debt into account.


Although Qualcomm isn't as large as Samsung or Intel as it stands, the purchase of the firm by chip maker Broadcom could change this, completely shaking up the tech industry.

Qualcomm said it would "assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders".

In response to Qualcomm's rejection, Broadcom has said it will look to engage with the chipmaker's board and management, adding that it had received positive feedback from key customers and stockholders.

Broadcom isn't taking no for an answer in its effort to take over Qualcomm.

Any deal would face scrutiny from the antitrust regulators as the combined company would own the high-end WiFi business globally, analysts said. However, according to sources it's likely to reject the offer according to sources, as it doesn't feel it's representative of the value of the company or the people in it.

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