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Qualcomm will meet with Broadcom to discuss $121 billion buyout

09 February 2018

It also hinges on Qualcomm not delaying or adjourning its annual meeting past March 6, when Qualcomm shareholders will vote on a new slate of directors recommended by Broadcom and private-equity firm Silver Lake Partners or retain the existing directors.

Broadcom had proposed acquiring all outstanding shares of Qualcomm for $82 per share, which breaks down to $60.00 in cash and $22 in Broadcom stock.

Qualcomm (NASDAQ:QCOM) says its board has unanimously rejected the revised buyout offer from Broadcom (NASDAQ:AVGO).

Qualcomm had rejected Broadcom's first unsolicited $103 billion acquisition offer in November, without engaging further.

In a letter to Qualcomm board members this week, Tan called the offer "extremely compelling compared to any other alternative available to Qualcomm" and called on the board to open talks on the proposal.

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Broadcom didn't immediately respond to a request for comment.

Specifically, Qualcomm wants to know if the latest bid submitted February 5 is the highest price Broadcom will offer and if the rival chipmaker will take whatever actions necessary to ensure the transaction closes.

Highlighting its commitment to the deal, Broadcom had also pledged to pay a "significant" breakup fee if regulators vetoed a deal, as well as pay additional cash if the two companies had not closed a transaction a year after its announcement.

Qualcomm argued on Thursday that this would not compensate Qualcomm if several large customers were to walk away or infringe their licensing agreements. However, Qualcomm has offered to meet with Broadcom to see if it can address the serious deficiencies in value and certainty in its proposal. Qualcomm primarily licenses its technology for the delivery of broadband and data, a business that would significantly benefit from the rollout of 5G wireless technology. Qualcomm is awaiting final regulatory clearance from China before making a final tender offer to NXP shareholders.Though Qualcomm contends the $110 per share price tag for NXP is fair, NXP stock is now trading at roughly $120 a share - indicating that investors expect a higher offer from Qualcomm. It is indisputable that there are significant regulatory hurdles in your proposed transaction. Qualcomm expects China's blessing as early as this month, at which point it has to decide whether it would raise its offer.

Qualcomm will meet with Broadcom to discuss $121 billion buyout