Qualcomm on Thursday rejected Broadcom’s revised US$121 billion buyout offer, but nevertheless opened the door to talks with the rival US chipmaker.
The company offered to meet with Broadcom to see whether they can address what it called the bid’s “serious deficiencies in value and certainty”, Reuters reports.
Qualcomm said Broadcom’s latest US$82 per share offer “materially undervalues” Qualcomm and falls short of the firm regulatory commitment it would demand given the significant antitrust risks involved.
Even though Broadcom has promised to pay a large breakup fee in the event regulators thwart the deal, as well as a “ticking” fee if the deal takes more than 12 months to close, Qualcomm believes Broadcom needs to offer a “hell-or-high-water” legal commitment to complete the deal irrespective of divestitures which antitrust watchdogs around the world may require, the report said.
“If you are not willing to agree to do whatever is necessary to ensure a transaction closes, we will need you to be extremely clear and specific about exactly what actions you would refuse to take, so that we can properly evaluate the risk to Qualcomm’s shareholders,” Qualcomm Chairman Paul Jacobs said in a letter addressed to Broadcom CEO Hock Tan, according to the report.
Broadcom launched its bid in early November, offering US$70 a share. Qualcomm rejected the offer, prompting its rival to go hostile.
Broadcom has nominated a slate of directors to replace Qualcomm’s board. Qualcomm shareholders will get to vote on these nominations at a March 6 meeting.
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