Qualcomm does not consider the $82 per share offer enough
Qualcomm has announced that its board of directors has unanimously rejected the revised non-binding, unsolicited proposal by Broadcom Limited (NASDAQ: AVGO) to acquire all of the outstanding shares of Qualcomm for $82.00 per share ($60.00 in cash and $22.00 in Broadcom stock), which Broadcom announced on February 5, 2018.
The Qualcomm Board, assisted by its financial and legal advisors, determined that the Broadcom proposal materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction. However, Qualcomm has offered to meet with Broadcom to see if it can address the serious deficiencies in value and certainty in its proposal.
“The Board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction,” Qualcomm chairman Paul Jacobs wrote in a letter to Broadcom CEO Hock Tan.
However, Jacobs didn’t completely rule out the prospect of a deal. He wrote, “The Board is committed to exploring all options for maximizing shareholder value, and so we would be prepared to meet with you to allow you to explain how you would attempt to bridge these gaps in both value and deal certainty and to better understand the significant issues that remain unaddressed in your proposal.”