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Qualcomm Rejects Broadcom's Buyout Proposal

Qualcomm Rejects Broadcom's Buyout Proposal

USA chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.

That worked out to a record-breaking $130 billion, but Qualcomm isn't having it. Qualcomm has released a statement saying Broadcom's offer "significantly undervalues" the company.

Just last week, Broadcom issued a note to investors in which they announced a "proposal to acquire all of the outstanding shares of" Qualcomm "for per share consideration of $70.00 in cash and stock".

Qualcomm has officially rejected the US$105 billion (about RM 440 billion) takeover offer from Broadcom.

Shares of Qualcomm were up 1.8 percent at $65.74 in early afternoon trading, while those of Broadcom were down 0.4 percent at $263.95. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", said Steve Mollenkopf, Chief Executive Officer of Qualcomm. The sources said Broadcom was preparing to submit a slate of directors by Qualcomm's December 8 nomination deadline. The latter claim may indicate that Qualcomm's Board Of Directors may not be interested in the potentially record-setting transaction even if Broadcom increases its bid.

More news: More Sunshine, Warmer Monday

At the time of writing Broadcom could not be reached for comment.

"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's shares have been weighed down by its legal battle with Apple over patent royalties, fines from antitrust regulators and slow progress on its planned $38 billion acquisition of NXP Semiconductors.

Broadcom has indicated it is willing to buy Qualcomm irrespective of whether it closes the NXP deal.

Shares of Qualcomm have been declining in value in the recent quarters, which is why Broadcom made its proposal.


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