NACD - National Association of Corporate Directors

Qualcomm Rejects Broadcom's Higher $121 Billion Hostile Bid

Broadcom Ltd. announced that its $121 billion acquisition proposal for Qualcomm Inc. is its "best and final" offer after the sweetened bid was unanimously rejected by the target's board of directors, states Bloomberg (Feb. 9, King). This likely leaves the future of the hostile takeover bid to be decided by shareholders at a meeting on March 6. Broadcom CEO Hock Tan is now urging Qualcomm to meet this weekend to discuss the $82-per-share offer. He has dangled the prospect of an $8 billion reverse termination fee in a letter to Chairman Paul Jacobs. "Tan said he was 'astonished' the target wasn't willing to meet until Tuesday," reports Bloomberg, "after the companies are scheduled to meet with proxy advisers Glass Lewis and ISS."

According to Reuters (Feb. 9, Roumeliotis, Bartz), Broadcom's latest $82 per share offer comprises $60 per share in cash and $22 per share in stock. Qualcomm issued a statement that said the bid not only "materially undervalues" the San Diego-based company, it also falls short of the firm regulatory commitment it would demand given the considerable antitrust risks involved.

The San Diego Union Tribune (Feb. 8, Freeman) notes that Qualcomm's ongoing legal battles with Apple Inc. and global antitrust regulators regarding patent licensing has weighed down its stock price for over a year now as other technology company stocks have skyrocketed. Late last year, Broadcom, a key Apple supplier, offered $70 per share for Qualcomm, which board members rejected as too low. Tan promptly nominated alternative candidates to replace all 11 members of Qualcomm's b