US chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.
That's a huge chunk of change, but apparently it wasn't enough to even tempt Qualcomm; their board has unanimously chose to reject Broadcom's offer. It doesn't appear Qualcomm was eager to accept the unsolicited offer, however, as the chip maker's board of directors has now unanimously rejected Broadcom's proposal.
Broadcom's proposal followed Tan's visit to the White House this month, where he met President Donald Trump and announced plans to move the tech company back to the United States from Singapore. The $105 billion bid does sound a lot but bear in mind that Nvidia's market cap is about $130 billion dollars, a product of great stock performance, but honestly, Qualcomm's portfolio seems broader and shows more potential on the long run. The BOD believes that Broadcom's offering undervalues Qualcomm and its growth perspectives in the upcoming 5G era.
It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of a European Union antitrust probe.
Broadcom doesnt care about the outcome of that deal it has stated that it wants to acquire Qualcomm with or without NXP.
Shares of Qualcomm have been declining in value in the recent quarters, which is why Broadcom made its proposal. Under the terms of the deal, shareholders of Qualcomm would get $60 in cash and $10 in Broadcom's stock for each share, which would be a 28% premium over the price of a Qualcomm share on November 2, 2017.
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