Qualcomm categorically rejects Broadcom's 'unsolicited' takeover offer

Qualcomm's board of directors could meet as early as Sunday to review the unsolicited acquisition offer and decide on its strategy, the sources said.

To recap, the $130 billion dollar deal would put Qualcomm's share value at $70, which is higher than what it was being valued for initially. Although analysts suggested the offer would be too low to win the backing of the company's board - and so it has proved.

That would allow Qualcomm shareholders to vote to replace the company's board and force it to engage with Broadcom.

In a statement today, Qualcomm said its board of directors has unanimously rejected Broadcom's unsolicited offer.

"No company is better positioned in mobile, "iot" (internet of things), automotive, edge computing and networking within the semiconductor industry", he said.

It's not clear how Broadcom will respond. Even before the deal was rebuffed Monday, Broadcom had been preparing for a proxy battle in which it would appeal directly to Qualcomm shareholders, according to a Bloomberg News report. "Can Broadcom develop a 5G baseband on its own?" Monday's back and forth signaled to Walkley that "Qualcomm's licensing business remains undervalued and both companies believe Qualcomm can resolve its licensing issues with Apple and another leading OEM".

It's ironic that the very circumstances that have hit the Qualcomm share price this year - accusations of anti-competitive behaviour - are one of the biggest threats to this deal ever going through. However, he agrees that the potential exists for "a fully-hostile bid", based on Broadcom's response and the fact that Qualcomm's board nomination deadline is nearing. "Integration with Broadcom means more delays and execution risks", he added.

Tan also said Broadcom "have received positive feedback from key customers about this combination".

Why? Well, for the simple reason Qualcomm believes it's worth more money.

The combined revenue of the three firms in question - Qualcomm, Broadcom and NXP - is expected to touch $51 billion in FY 2017 with EBIDTA of aroud $23 billion, forecasts the semiconductor fiem, justifying its proposal.

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