Qualcomm Board to Weigh Broadcom Takeover Bid, Says It Will Do What’s Best for Shareholders
Qualcomm’s board will weigh Broadcom’s “unsolicited” takeover proposal of $70 a share -- $60 a share in cash, the rest in Broadcom stock, said Qualcomm in a Monday statement. The board will do what’s best for Qualcomm shareholders, and the…
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company will have no further comment until the board finishes its review, it said. Broadcom, in a Monday statement, said its $70-a-share offer is a 27.6 percent premium over Qualcomm’s $54.84 closing price Thursday, “the last unaffected trading day prior to media speculation regarding a potential transaction.” Reports speculating on a deal that would be valued at $103 billion sent Qualcomm shares soaring 12.7 percent Friday to close at $61.81. Qualcomm shares closed 1.2 percent higher Monday at $62.52, while Broadcom shares closed up 1.4 percent at $277.52. A combined Broadcom/Qualcomm would become “a global communications leader with an impressive portfolio of technologies and products,” said Broadcom CEO Hock Tan in the statement: “We would not make this offer if we were not confident that our common global customers would embrace the proposed combination.". The combined company would become the No. 3 global semiconductor supplier, said Stuart Carlaw, ABI Research chief research officer. Qualcomm shareholders “are likely to be split” over the Broadcom offer, “with many viewing this opportunity as a solution to the worsening relations with Apple, whom Broadcom has a good relationship with,” he said. Broadcom/Qualcomm “raises significant questions surrounding the difficult takeover of NXP by Qualcomm and much is still to be discerned regarding the value of the Qualcomm patent holdings and its associated lucrative high-margin revenue stream,” he said. Qualcomm still hopes to close its $110-a-share NXP buy by year-end, but the slower than expected regulatory approval process may cause the close to slip into 2018, executives said last week.