Qualcomm rejects Broadcom's $100 billion-plus takeover bid

"It is the board's unanimous belief that Broadcom's proposal significantly undervalues Qualcomm relative to the Company's leadership position in mobile technology and our future growth prospects", executive chairman Paul Jacobs said in a release. Not long after, Broadcom made its $130 billion offer official, valuing Qualcomm at $70 per outstanding share.

Qualcomm CEO Steve Mollenkopf added that the USA chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas.

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Analysts said Broadcom could easily raise its bid to $80 or $90 per share-or as much as $130 billion-and still make out well with the acquisition.

"We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders", Broadcom president and CEO Hock Tan in a statement.

Steve Mollenkopf, Chief Executive Officer of Qualcomm reinforced this statement with his own. "Qualcomm's "thanks, but no thanks" response to the unsolicited bid by Broadcom isn't surprising and we would be surprised if at this point, Broadcom didn't move forward with a proxy fight", Loop Capital analyst Betsy Van Hees told Reuters. Qualcomm and Broadcom did not immediately respond to requests for comment.

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Qualcomm has been facing a series of investigations around the world linked to its dominance in the smartphone chip segment.

It's not yet clear how Broadcom will respond to Qualcomm's rejection of its first offer.

But Qualcomm's beaten down stock price showed far less optimism among investors that a deal could be consummated quickly.

The original approach came on November 6, when Broadcom offered $70 a share for Qualcomm.

It comes as Qualcomm seeks a $47 billion acquisition of Dutch rival NXP, a deal that is the subject of an European Union anti-trust probe.

This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.

  • Toni Ryan