Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Qualcomm    QCOM

My previous session
Most popular
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets

Qualcomm : and Broadcom Spar Over Latest Merger Proposal -- 2nd Update

share with twitter share with LinkedIn share with facebook
share via e-mail
02/09/2018 | 08:49am CEST
By Ted Greenwald 

Qualcomm Inc. rejected Broadcom Ltd.'s sweetened offer of more than $121 billion but opened the door for the first time to talks with its hostile suitor.

Broadcom responded late Thursday with a letter urging Qualcomm to meet as soon as possible and providing it with a proposed merger agreement.

Qualcomm earlier Thursday said its board decided unanimously that the latest offer of $82 a share, which Broadcom Chief Executive Hock Tan proposed earlier this week as his "best and final offer," considerably undervalues the chip maker. The directors also said the revised offer still doesn't go far enough to ensure international regulators would approve it.

However, Qualcomm offered to meet with Broadcom to address these issues.

Qualcomm shares rose 1.2% to $63.15 in after-hours trading. Broadcom shares were up fractionally at $230.40.

In a letter made public Thursday evening in California, Mr. Tan said that Broadcom had offered to meet with Qualcomm in the coming several days, but that Qualcomm had been unwilling to meet until Tuesday, after the companies are scheduled to meet with Institutional Shareholder Services Inc. and Glass Lewis & Co., firms that advise big shareholders on corporate votes.

"We urge you to meet with us without further delay," Mr. Tan wrote.

Broadcom also provided a proposed merger agreement that included a provision for an $8 billion fee it would pay Qualcomm, under certain conditions, if a deal were to fail for regulatory reasons.

Broadcom launched its bid in early November, offering $105 billion, or $70 a share, in what would be tech's largest-ever deal. Qualcomm rejected the offer, prompting its chip rival to go hostile, nominating its own directors for Qualcomm's board.

Qualcomm shareholders will have a chance to vote on Broadcom's slate at a scheduled March 6 meeting.

Mr. Tan's revised bid, which represents a 50% premium over Qualcomm's share price the day before news reports of an expected approach, included an unspecified breakup fee, which Mr. Tan in an interview Monday said would amount to billions of dollars. It also included an additional fee to compensate shareholders if the regulatory process took more than a year.

Mr. Tan said in the Monday interview that to satisfy regulators, Broadcom is ready to divest itself of businesses in which the company and Qualcomm overlap, including Wi-Fi chips for communications networks and chips that process cellular signals in handsets.

In an open letter to Mr. Tan on Thursday, Qualcomm Chairman Paul Jacobs questioned whether $82 a share was indeed his highest offer. "What is the true highest price at which you would be prepared to acquire Qualcomm?" he asked.

"Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector," he said in the letter.

Mr. Jacobs said Broadcom's latest bid failed to take into account Qualcomm's value if it resolves its dispute with Apple Inc., which is withholding billions in royalty payments as lawsuits wend their way through courts in several countries, and completes its yearlong pursuit of NXP Semiconductors NV, a deal still awaiting antitrust approval in China.

Broadcom's revised offer also didn't account for Qualcomm's opportunities as the fifth-generation cellular standard known as 5G reaches the market, Mr. Jacobs said. Qualcomm believes its 5G market could be worth more than $50 billion by 2020, according to a mid-January presentation to shareholders.

Mr. Tan's response Thursday night reiterated that $82 a share is Broadcom's "best and final offer."

Qualcomm has said it regards a world-wide regulatory green light as unlikely. In the letter, Mr. Jacobs requested Broadcom commit to taking any necessary steps to get the proposed merger through international regulatory approvals.

Qualcomm said it has other issues to discuss but didn't elaborate. The company said it would "reach out" to Broadcom to schedule a meeting.

Steven Ré, investment chief at Fairbanks Capital Management Inc., whose portfolios are 17% made up of Qualcomm stock, said he is delighted the companies are finally engaging.

"In a peaceful deal, they can probably talk Hock Tan up another $5, maybe $7," he said.

Write to Ted Greenwald at Ted.Greenwald@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
QUALCOMM 0.50% 65.1456 Delayed Quote.1.25%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on QUALCOMM
08/10QUALCOMM : Taiwan Fair Trade Commission Reach Settlement
08/10Qualcomm settles anti-trust case with Taiwan regulator for $93 million
08/10Qualcomm settles anti-trust case with Taiwan regulator for $93 million
08/10QUALCOMM : and Taiwan Fair Trade Commission Reach Settlement; - Settlement Ends ..
08/10QUALCOMM : Taiwan Reach Settlement in Patent-Licensing Dispute
08/10QUALCOMM : and Taiwan Fair Trade Commission Reach Settlement
08/09QUALCOMM : Snapdragon 845 Mobile Platform Powers Superior Connectivity and Immer..
08/08Elon Musk's Tesla buyout would reengineer take-private deals
08/08INTRINSYC (TSX : ITC and OTC: ISYRF) Enters into a 3G/4G Patent License Agreemen..
08/08Elon Musk's Tesla buyout would reengineer take-private deals
More news
News from SeekingAlpha
08/13Is Your Data Talking To You, And Are You Listening? 
08/10EAA Announces August 2018 Portfolio 
08/10Contagion Concerns Erupt From Turkey (Wall Street Breakfast Podcast) 
08/10WALL STREET BREAKFAST : Contagion Concerns Erupt From Turkey 
08/10Qualcomm settles with Taiwan antitrust regulator 
Financials ($)
Sales 2018 22 432 M
EBIT 2018 5 564 M
Net income 2018 -3 737 M
Finance 2018 10 674 M
Yield 2018 3,66%
P/E ratio 2018 -
P/E ratio 2019 18,23
EV / Sales 2018 3,77x
EV / Sales 2019 4,26x
Capitalization 95 228 M
Duration : Period :
Qualcomm Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends QUALCOMM
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 67,7 $
Spread / Average Target 4,5%
EPS Revisions
Steven M. Mollenkopf Chief Executive Officer & Director
Cristiano R. Amon President
Jeffrey William Henderson Non-Executive Chairman
George S. Davis CFO, Principal Accounting Officer & Executive VP
Mary Gendron Chief Information Officer & Senior Vice President
Sector and Competitors
1st jan.Capitalization (M$)
QUALCOMM1.25%95 228
CISCO SYSTEMS14.23%205 892
ERICSSON32.22%26 074