Qualcomm is open to more Broadcom talks

Qualcomm said Monday it is ready for further talks with rival Broadcom to see if the two sides can negotiate a sale of the San Diego cellular technology giant, with price remaining a key sticking point.

In a letter sent to Broadcom on Monday, Qualcomm Chairman Paul Jacobs revealed that representatives of the two companies met for a second time Feb. 23, where they made progress on some of the protections Qualcomm is seeking during what’s expected to be a long regulatory review of the deal by global competition agencies.

But Qualcomm also wants additional steps — including a higher breakup fee should antitrust regulators block the deal and more details about Broadcom’s plans to revamp Qualcomm’s lucrative patent-licensing business.

In addition, Qualcomm contends Broadcom’s $79-ashare offer remains well below the fair value of the company given its pending acquisition of NXP Semiconductors to diversify beyond smartphones, an eventual settlement of patent-fee disputes with Apple, and growth from new 5G mobile networks.

“While we have made progress on regulatory and other deal-certainty issues, you have continued to insist that your current $79 per share proposal is your best and final proposal,” Jacobs said in the letter to Broadcom Chief Executive Hock Tan. Qualcomm’s board “continues to be of the unanimous belief that ... your proposals ... materially undervalue Qualcomm.”

Qualcomm’s willingness to talk comes as the San Diego company’s shareholders are expected to vote March 6 on whether to support Broadcom’s hostile takeover bid.

Broadcom has nominated six alternative candidates to Qualcomm’s board, which would give Broadcom a majority to push through its $117-billion takeover.

Qualcomm rose $3.66, or 5.8%, to $66.98 on Monday.