Broadcom to raise Qualcomm bid in push for talks, sources say

SAN FRANCISCO — Broadcom Ltd. plans to unveil a new approximately $120-billion offer for Qualcomm, Inc. on Monday, aiming to ratchet up pressure on its US semiconductor peer to engage in negotiations, people familiar with the matter said on Sunday.

The move comes ahead of a Qualcomm shareholder meeting scheduled for March 6, when Broadcom is seeking to replace Qualcomm’s board of directors by nominating its own slate for election.

Broadcom is scheduled to meet with its advisers later on Sunday to finalize an offer that values Qualcomm between $80 and $82 per share, two of the sources said. Broadcom’s previous $70 per share offer consisted of $60 per share in cash and $10 per share in stock.

Broadcom also plans to offer Qualcomm a higher-than- usual breakup fee in the event regulators thwart the deal, according to the sources. Typically, such breakup fees equate to approximately 3% to 4% of a deal’s size.

The sources cautioned that Broadcom Chief Executive Officer Hock Tan may decide to significantly change the terms at the last minute.

The sources asked not to be identified because the deliberations are confidential. Broadcom and Qualcomm did not immediately respond to requests for comment.

Broadcom has said it is very confident a deal can be completed within 12 months of signing an agreement. Qualcomm counters that the regulatory review processes required around the world would take more than 18 months and be fraught with risks.

Qualcomm provides chips to mobile carrier networks to deliver broadband and data, making it an attractive acquisition target for Broadcom, which hopes to expand its offerings in so-called 5G wireless technology.

Qualcomm has argued to its shareholders that Broadcom’s hostile bid is aimed at acquiring the company on the cheap. —