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Qualcomm rejects Broadcom’s revised offer
February 10, 2018
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NEW YORK: US semiconductor company Qualcomm rejected Broadcom’s revised $121 billion buyout offer, but proposed meeting its peer to see whether they can address what it called the bid’s “serious deficiencies in value and certainty.”

Qualcomm’s response attempts to strike a balance between continued resistance of Broadcom’s takeover attempt and heeding the calls of some Qualcomm shareholders, who urged the company in recent days to engage with its rival in case it can clinch an attractive deal.

Broadcom said it proposed to meet by this weekend, but Qualcomm was not willing to meet until Tuesday, after the two companies’ respective meetings with proxy advisors Glass Lewis and ISS.

“We hope that your willingness to meet with us reflects Qualcomm’s genuine intent to reach an agreement with respect to our February 5 proposal,” Broadcom CEO Hock Tan told Qualcomm Executive Chairman Paul Jacobs in a letter published by Broadcom.

Broadcom said its latest offer was “best and final” and that it had strong Qualcomm stockholder support.

Qualcomm had rejected Broadcom’s first unsolicited $103 billion acquisition offer in November, without engaging further. In response, Broadcom nominated a slate of directors to replace Qualcomm’s board.

Qualcomm shareholders are scheduled to vote on these nominations at a March 6 meeting.

Qualcomm said Broadcom’s latest $82 per share offer, comprising $60 per share in cash and $22 per share in stock, “materially undervalues” Qualcomm and falls short of the firm regulatory commitment it would demand given the significant antitrust risks involved.

Qualcomm shares were up 1.1 per cent at $63.12 in after-hours trading on Thursday. Broadcom shares were up 1 per cent at $232.00.

Broadcom has promised to pay a breakup fee of $8 billion in the event regulators thwart the deal, as well as a “ticking” fee of 6 per cent per year on the cash portion of the consideration if the deal takes more than 12 months to close.

Qualcomm argued on Thursday this would not compensate Qualcomm if several large customers were to walk away or infringe their licensing agreements.

Reuters

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