Broadcom offers $8 bn to Qualcomm if deal is blocked

Broadcom offers $8 bn to Qualcomm if deal is blocked

Broadcom offers $8 bn to Qualcomm if deal is blocked

Qualcomm has offered to talk to Broadcom to come up with a better deal.

But the question of when still remains.

Qualcomm Inc warned on Friday it could lose two large clients if it accepted chipmaker Broadcom Ltd's revised $121 billion buyout offer and said it saw "no next step" for regulatory approval of any deal.

Broadcom has been pursuing an acquisition of competing chipmaker Qualcomm since November for the price of $70 per share or an overall valuation of $105 billion.

After the close of trading Thursday, Qualcomm issued a statement saying its board of directors has unanimously rejected Broadcom's bid of $82 a share on the grounds that it "materially undervalues Qualcomm".

Qualcomm has rejected Broadcom's latest US$121 billion (~RM476 billion) bid to buy out the company.

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"We hope that your willingness to meet with us reflects Qualcomm's genuine intent to reach an agreement with respect to our February 5 proposal", Broadcom CEO Hock Tan told Qualcomm Executive Chairman Paul Jacobs in a letter published by Broadcom. Alternatively, Qualcomm may terminate the deal, which is also an option stipulated in Broadcom's acquisition offer.

Qualcomm shareholders are scheduled to vote on these nominations at a March 6 meeting.

Broadcom has announced its "best and final offer" for larger rival Qualcomm, as it continues its attempts at a hostile takeover of the company. Broadcom is expected to put its own nominees up for election to Qualcomm's board of directors, Reuters reported.

If the deal were to go through, it would represent a world-record takeover value. It also says there is a negative risk involved if the acquisition fails because of the disapproval of the regulators. Once that happens, Qualcomm will need to negotiate with a group of funds that have taken a position in the Dutch company's stock, demanding a boost to the US$110-a-share price agreed to by NXP's board. That cash influx fuels industry-leading research and design, which in turn helps the chip unit build the most advanced products.

It seems as if Broadcom won't give up on Qualcomm anytime soon.

The combined company would create a semiconductor giant with more than $50 billion in annual revenue - trailing only Intel and Samsung.

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