Qualcomm said Monday that its board has unanimously rejected Broadcom’s $130 billion unsolicited proposal, holding that the proposal “significantly undervalues” Qualcomm’s future growth prospects.
Broadcom announced its unsolicited bid for the fellow chipmaker on November 6, offering $70 per share in cash and stock, plus $25 billion of net debt. At the time, the proposal was a 28% premium over the closing price of Qualcomm common stock on November 2, the day before reports surfaced that a proposal by Broadcom was in the works.
Following a review of the offer, Qualcomm said Broadcom’s bid isn’t enough to move the needle, given the company’s plans to deliver advanced silicon in areas such as mobile and the Internet of Things.
“It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects,” Paul Jacobs, executive chairman and chairman of the board of Qualcomm, said, in a statement.
“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” added Steve Mollenkopf, Qualcomm’s CEO.
When it announced the bid, 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.
Broadcom has been asked for further comment.
Update: Broadcom said it is fully committed to the offer, and that its proposal stands whether or not Qualcomm is able to move ahead with its proposed acquisition of NXP Semiconductor.
"This transaction will create a strong, global company with an impressive portfolio of industry-leading technologies and products, and we have received positive feedback from key customers about this combination,” Hock Tan, Broadcom’s president and CEO, said in a statement. “We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction. Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal. It remains our strong preference to engage cooperatively with Qualcomm's Board of Directors and management team."