Qualcomm’s Board of Directors has unanimously rejected Broadcom’s unsolicited $100-plus-billion buyout offer, saying it drastically undervalued the company and was not in shareholders’ best interest.
In a statement released Nov. 13, a week after semiconductor device supplier Broadcom offered the local cellphone chipmaker a 28 percent premium over the closing price of its stock on Nov. 2, Tom Horton, Qualcomm’s Presiding Director said the company’s current strategy, led by CEO Steve Mollenkopf, provided “far superior value to Qualcomm shareholders than the proposed offer.”
“After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty,” Horton said.
But this could be settling the stage for a battle, or at least negotiations.
In a statement also dated Nov. 13, Broadcom reaffirmed its intent to take over Qualcomm. Broadcom CEO Hock Tan said combining the two companies would “create a strong, global company with an impressive portfolio of industry-leading technologies and products.”
“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,” Tan said. “It remains our strong preference to engage cooperatively with Qualcomm’s Board of Directors and management team.”