Qualcomm has no plans to accept any takeover attempt by rivals Broadcom. News of a potential $100 billion offer appeared last week, as Broadcom was supposedly ready buy over its biggest competition in the semiconductor business.
According to Reuters, Qualcomm’s board of directors is set to meet to discuss the impending offer. Sources supposedly claim that the board will reject the $70-per-share bid for undervaluing the value of the company. The announcement of the rejection is set to be made Monday, although the sources say that the board may take a few extra days to review its response.
Broadcom CEO Hock Tan does not appear to be deterred by a potential rejection. He is supposedly preparing to engage in a full out takeover battle. Starting with submitting a number of nominations for Qualcomm’s board of directors. Replacing board members with people friendly to Broadcom would force the two companies into talks with each other.
The Singapore-based company – which is also currently relocating to the US – is supposedly considering raising its bid for Qualcomm. That said, offering more money would require Broadcom to go through more debt financing.
It’s not entirely clear why Broadcom is going after its rival. Qualcomm has been embroiled in several lawsuits with Apple and Samsung; and has been accused of using its dominant position in the mobile to extract unfavourable terms when negotiating contracts. Wading into these problems is not something most companies would relish, but it would appear that Broadcom is undeterred by some minor legal issues.
[Source: Reuters]
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