Qualcomm’s board of directors unanimously rejected an acquisition proposal through competitor Broadcom, the company announced on Thursday.
Broadcom had proposed acquiring all outstanding shares of Qualcomm for $82 per share, which breaks down to $60.00 in cash in addition to also $22 in Broadcom stock. Broadcom previously described the $121 billion as its “best in addition to also final offer.”
In a letter through Qualcomm chairman Paul Jacobs to Broadcom CEO Hock Tan, the board detailed their decision.
“The Board has unanimously determined which your amended offer materially undervalues Qualcomm in addition to also falls well short of the firm regulatory commitment the Board could demand given the significant downside risk of a failed transaction,” Jacobs wrote within the letter.
Jacobs didn’t completely strike out the prospect of a deal. He said the Qualcomm board could be open to meeting with Broadcom to explore “all options for maximizing shareholder value,” although reiterated the board’s view which the proposal is actually “inferior” relative to Qualcomm’s prospects as an independent company.
He also laid out questions for Broadcom should the two companies meet, including whether $82 per share genuinely is actually Broadcom’s highest offer, in addition to also just how far Broadcom was willing to go to close the deal.
Qualcomm struck down a previous acquisition offer through Broadcom in November 2017, using a similar argument. Broadcom had offered to purchase Qualcomm stock at $70 per share.
In December, Qualcomm rejected director nominees picked by Broadcom in addition to also private-equity firm Silver Lake Partners, setting the stage for a proxy battle between the chipmakers.
proposed by Broadcom in addition to also Silver Lake Partners to replace Qualcomm’s current directors.
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