Qualcomm rejects $103bn takeover bid from rival Broadcom

Qualcomm rejects $103bn takeover bid from rival Broadcom

Broadcomm says it will continue its efforts to acquire rival chip designer Qualcomm despite a unanimous rejection of its $103bn buyout offer.

Qualcomm rejected an unsolicited, $103 billion offer from Broadcom, saying that the proposal is significantly undervalued and that a tie-up between the massive chipmakers would face substantial regulatory resistance. Another tactic Broadcom could use is to nominate directors for Qualcomm's board ahead of the company's annual general meeting in 2018.

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QCOM shares traded as high as $80 just a few years ago, so it makes sense that the company wouldn't be ecstatic with a $70 takeover offer. That would permit Qualcomm shareholders to vote to change the company's board and force it to engage with Broadcom.

The bid takes advantage of Qualcomm's weakened position after a year marred by conflicts with Apple Inc. over its patent royalty fees and worldwide regulators alleging anticompetitive business practices.

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In morning trading in New York, Qualcomm's shares were up 1.2% to $65.38. Qualcomm's profit in the fiscal year ended September 24 plummeted 57%, and its share price sank about 18% in the 12 months leading up to the bid. If Qualcomm had approved the deal, the combined company would have created major changes in the chipmaking industry. With the assumption of Qualcomm's debt, the deal would have been worth as much as $130 billion.

In its latest earnings call with analysts, Qualcomm CEO Steve Mollenkopf said the company aimed to close the NXP deal by the end of the year but it could slip until next year. Qualcomm has more, including the soon to finish NXP acquisition, a great patent portfolio, high-end phone SoC leadership, Modem and WiFi leadership in 4G and 5G and even automotive, the world's first 10nm server and Windows 10 holding great Snapdragon potential. "With a more extensive item broadening and a more noteworthy scale, the joined endeavor will be in the position to offer all the more mechanically propelled semiconductor answers for the organization's worldwide customers and lift investor esteem", he included.

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