Published: Tue, November 14, 2017
Science | By Eileen Rhodes

Qualcomm will reportedly reject Broadcom's offer

Qualcomm will reportedly reject Broadcom's offer

Keep in mind, this offer from Broadcom wasn't solicited, so it isn't as if Qualcomm and Broadcom were in talks about a merger before Broadcom plopped its $130 billion bid on the table. Another tactic Broadcom could use is to nominate directors for Qualcomm's board ahead of the company's annual general meeting in 2018.

The source said Qualcomm's board of directors could huddle up on Sunday to examine the unsolicited acquisition bid and think of its strategy.

Qualcomm's board believes that Broadcom's proposal significantly undervalues Qualcomm given its leadership position in mobile technology and their future growth opportunity.

But Qualcomm Chief Financial Officer Steve Mollenkopf said that Qualcomm is in a competitive position where it doesn't need to jump at an offer, even one as large as Broadcom's.

This comes shortly after Qualcomm filed another lawsuit against its main chip purchaser, Apple, claiming that it broke a confidentiality clause found in its contract.

More news: Ireland to reach fourth straight World cup finals

Qualcomm has officially rebuffed Broadcom's acquisition offer, which would mark the biggest-ever deal in the tech industry.

Broadcom Ltd., also announced, in the company of President Donald Trump, that it would bring its corporate address back from Singapore, to Delaware. Qualcomm and Broadcom 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. It is involved in a patent infringement clash with Apple Inc. and is also raising efforts to close its $38 billion acquisition of automotive chipmaker NXP Semiconductors NV after ratifying a deal in October 2016.

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.

As of 1650 GMT, Qualcomm shares were up 1.78% to $65.72 each and Broadcom had posted a 0.24% uptick to $265.61 per share.

As we said when the proposal was announced, it's likely that Broadcom also smelled blood in the water, because Qualcomm is now fighting a battle on multiple fronts, what with the ongoing dispute with Apple, the Federal Trade Commission (FTC) investigation, and other conflicts. It said its dominance of the mobile processors market and future growth prospects mean it is unable to accept Broadcom's valuation.

Like this: