Continuing its fight for Qualcomm, Broadcom said it has made its “best and final” offer to acquire all of the fellow chipmaker for $82 per share, comprised of $60 in cash per share and the remainder in Broadcom shares.
Last November, Broadcom originally offered $70 per share -- the same amount of cash ($60 per share), but just $10 of Broadcom shares.
Broadcom said its higher, revised offer, already approved by its board, represents a 50% premium over the closing price of Qualcomm common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential deal between the companies. Broadcom also said it’s a premium of 56% to Qualcomm's unaffected 30-day volume-weighted average price.
Broadcom also reiterated that its improved offer is premised on several other potential factors, including Qualcomm acquiring NXP Semiconductors for $110 per NXP share, or if that deal is terminated, and also premised on Qualcomm not delaying or adjourning its annual meeting past March 6, 2018.
Qualcomm, which had already rejected Broadcom’s earlier (and lower) unsolicited offer, confirmed that it had received the revised offer from Broadcom and that its board will review it to determine the next course of action.
Broadcom expressed confidence that it’s revised proposed transaction would be completed within 12 months of the singing of a definitive agreement, but said it would pay a “ticking fee” in the form of an increase in the cash consideration due to Qualcomm stockholders if a deal was not closed within that timeframe.
Among other concessions, Broadcom said it’s also prepared to pay Qualcomm a “significant ‘reverse termination fee’” if the deal did not pass regulatory muster. The Broadcom board is also prepared to invite Paul Jacobs, executive chairman and chairman of the board at Qualcomm, and another current Qualcomm director to join the board of a merged entity.
When it announced the original bid on Nov. 6, 2017, Broadcom, a top supplier of set-top box and DOCSIS modem silicon, had argued that Qualcomm’s focus on cellular technology would make it a complementary marriage and accelerate the pace of innovation.
Qualcomm said that Broadcom’s earlier proposal “significantly undervalues” the chipmaker. Broadcom on Monday argued that its new offer is “vastly superior to Qualcomm’s standalone prospects” with our without the pending NXP transaction.