MUMBAI: US semiconductor company Qualcomm has rejected Broadcom’s revised $121 billion buyout offer. The decision was taken unanimously by Qualcomm’s Board of Directors.
In a statement, the company said that Broadcom’s proposal “materially undervalues” Qualcomm. It fell short of the firm regulatory commitment the deal would demand, given the significant downside risk of a failed transaction.
However, the company has proposed a meeting to see whether it can address what it called the bid’s “serious deficiencies in value and certainty”.
The company hoped that Broadcom will be prepared to provide clear, specific and detailed answers to their questions. The board directors of Qualcomm wants to know if Broadcom is willing to commit to taking whatever actions are necessary to ensure the proposed transaction closes. It has also asked for the true highest price at which Broadcom is prepared to acquire Qualcomm and whether it is $82 per share or higher.
On 5 February, Broadcom had increased its offer to $82 a share from $70 a share, saying it was its “best and final” offer. With this offer, Broadcom raised the stakes a month before Qualcomm’s annual shareholder meeting, at which the company hoped to unseat the entire board.
The company had also pledged to pay a “significant” breakup fee if regulators vetoed a deal, as well as pay additional cash if the two companies had not closed a transaction a year after its announcement. It also promised other steps to close the deal, including selling overlapping businesses.