Broadcom increased the bid to buy competitor Qualcomm
American chip maker Broadcom increased the bid to buy competitor Qualcomm Inc. With the proposed acquisition price of about 121 billion USD, the transaction may become the largest in history not only in the technology sector.
Broadcom offers to pay 82 USD per share to Qualcomm. This is the last offer for the purchase, according to a statement from the company. As part of the deal, it is proposed to pay 60 USD per share in cash and the rest – with Broadcom shares.
In November Broadcom made a bid for acquisition of Qualcomm, valuing the company at 105.0 billion USD. Broadcom has offered to pay 70 USD per share to its competitor: 60 USD in cash and another 10 USD with buyer’s shares. Qualcomm, however, rejected Broadcom’s offer by informing shareholders that this offer underestimated the company and was “accompanied by significant regulatory uncertainty”.
Broadcom’s Chief Executive Officer, Hock Tan, is now pushing Qualcomm chief executive Stephen Molenkoff and his board of directors, who have so far refused to negotiate. With the increase in the bid, Tan also improves the prospects for choosing his Qualcomm’s board of directors to vote in next month’s vote. If successful, it will neutralize the current opposition.
The current member of Qualcomm’s Board Paul Jacobs, as well as another board member, were invited to join the new board.
The proposal also includes a Qualcomm purchase condition for NXP Semiconductors NV. Broadcom said the deal would either be negotiated at the current price or canceled. But NXP shareholders say Qualcomm’s offer to buy the company at 110 USD per share should be improved.
Qualcomm’s hostile takeover attempt is Hock Tan’s latest and most daring step in a series of deals that have made Broadcom one of the world’s largest semiconductor suppliers. However, Qualcomm said its prospects as a separate company were much brighter.