Reuters: Qualcomm will reject Broadcom's $100 billion acquisition offer this week

Source: Content from Sina Technology, thank you.

On the morning of November 13th, Beijing time, Reuters quoted four people familiar with the matter as saying that US chipmaker Qualcomm is preparing to reject a $100 billion acquisition offer from rival Broadcom earlier this week. If the acquisition is successful, it may become the largest acquisition in the history of the chip industry.

Sources said Qualcomm's board of directors may meet as early as Sunday to review Broadcom's acquisition offer and decide on its response strategy. The board meeting revealed that Qualcomm was prepared to make a brief statement on its rejection of the acquisition offer by Monday, but the company may decide to spend a few more days this week to prepare a full and complete response to the rejection of Broadcom's acquisition.

Sources said Qualcomm CEO Mollenkopf has been soliciting feedback from Qualcomm shareholders over the past few days. He believes that Broadcom's offer of $70 per share underestimates Qualcomm's value and does not prepare a risk premium for the uncertainty of obtaining regulatory approval.

Broadcom CEO Hock Tan said earlier this month he would move his company's headquarters back to the United States from Singapore and that he was willing to launch a takeover battle to acquire Qualcomm. Broadcom is preparing to submit a slate of board members before the Dec. 8 nomination deadline, the sources said.

Some sources have said Broadcom has also been considering raising its offer for Qualcomm, including through more debt financing, though it is unclear whether Broadcom will choose to do so.

Qualcomm attempted to acquire automotive chip maker NXP Semiconductors for $38 billion in October 2016. Broadcom said it was willing to acquire Qualcomm regardless of whether Qualcomm succeeded in acquiring NXP.

NXP shares have been trading above Qualcomm's offer as many NXP shareholders, including hedge fund Elliott Management Corp, have been pushing for a higher price. Qualcomm does not plan to significantly increase its offer for NXP as a defensive strategy to make a takeover by Broadcom more expensive, according to one of the sources.

Qualcomm shares closed at $64.57 on Friday, while Broadcom closed at $264.96.

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