Broadcom sweetens Qualcomm bid, calling it the final offer
KUALA LUMPUR: Chipmaker Broadcom Ltd has raised its offer to buy Qualcomm Inc by 24% to more than US$121bil (RM472bil), sweetening the bid and putting more pressure on its rival to come to the table for negotiations.
“Qualcomm and its board now have a tough decision as this is a compelling offer in our opinion,” said analyst Daniel Ives of GBH Insights.
The new offer yesterday values the company at US$82 per share – a premium of 24% from Qualcomm’s close on Friday. It also puts pressure on Qualcomm to either buy NXP Semiconductors NV at US$110 per share or terminate the US$38bil deal.
NXP shareholders had held up a deal, saying it undervalued the company and had sought a price as high as US$135.
Qualcomm shares were down 3% at US$64 in premarket trading. They were up 25.5% in the last 12 months as of Friday’s close.
Broadcom shares were fell 2% to US$239. NXP shares were slightly down at US$120.10.
Qualcomm in November rejected Broadcom’s US$70 per share cash-- and-stock bid that valued the company at US$103bil.
In the new offer, Qualcomm shareholders would get US$60 in cash and US$22 in Broadcom shares. Broadcom’s previous US$70 per share offer consisted of US$60 per share in cash and US$10 per share in stock.
“We believe Broadcom is serious and aggressive around acquiring Qualcomm and this higher bid reflects that,” Ives said.
Qualcomm, which had said Broadcom’s offer significantly undervalued the company, could not immediately be reached for comment.
Reuters reported exclusively on Sunday that Broadcom had planned to raise its offer.
After Qualcomm rejected its earli- er offer, Broadcom and private equity firm Silver Lake Partners took the offer hostile by nominating 11 directors to its board in December. Qualcomm later rejected the nominees.
Shareholders will vote for or against the nominees at an annual meeting on March 6.
Singapore-based Broadcom is known for its connectivity chips used in products ranging from mobile phones to servers and Qualcomm provides chips to mobile carrier networks to deliver broadband and data.
Broadcom said yesterday it remained confident that the deal would be completed within 12 months following a definitive agreement.
Qualcomm had said that the regulatory review processes required around the world would take much longer.
Any deal between the two companies would attract significant scrutiny across several countries where they operate.
The US Federal Trade Commission last month made a second request for information on Broadcom’s bid.