Qual­comm turns down $103B of­fer

Richmond Times-Dispatch - - BUSINESS -

Qual­comm re­jected an un­so­licited, $103 bil­lion of­fer from Broad­com, say­ing that the pro­posal is sig­nif­i­cantly un­der­val­ued and that a tie-up be­tween the mas­sive chip­mak­ers would face sub­stan­tial reg­u­la­tory re­sis­tance.

Qual­comm said Mon­day that it’s in a unique po­si­tion to grow on its own.

“We are highly con­fi­dent that the strat­egy (CEO Steve Mol­lenkopf) and his team are ex­e­cut­ing on pro­vides far su­pe­rior value to Qual­comm share­hold­ers than the pro­posed of­fer,” said Tom Hor­ton, Qual­comm di­rec­tor.

Broad­com’s bid last week rep­re­sented a 28 per­cent premium over the clos­ing price of Qual­comm shares on Nov. 2, but an­a­lysts were ex­pect­ing Qual­comm to re­ject the $70-per-share bid.

Broad­com said Mon­day that it re­mains com­mit­ted to pur­su­ing a deal. “We have re­ceived pos­i­tive feed­back from key cus­tomers about this com­bi­na­tion,” CEO Hock Tan said in a state­ment. “We con­tinue to be­lieve our pro­posal rep­re­sents the most at­trac­tive, value-en­hanc­ing al­ter­na­tive avail­able to Qual­comm stock­hold­ers.”

San Diego-based Qual­comm, which makes the Snap­dragon chips found in smart­phones and tablets, is the world’s No. 3 chip sup­plier, ac­cord­ing to re­search firm Gart­ner. A com­bi­na­tion with Broad­com would not have pro­pelled it past in­dus­try lead­ers.

Broad­com Ltd. also an­nounced, in the com­pany of Pres­i­dent Don­ald Trump, that it would bring its cor­po­rate ad­dress back from Sin­ga­pore to Delaware.

The com­pany hopes the change will make it easier to get deals done and more specif­i­cally help it avoid a cum­ber­some fed­eral re­view process for a $5.5 bil­lion deal for U.S. net­work provider Bro­cade Com­mu­ni­ca­tions Sys­tems.

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