Qualcomm $QCOM Rejects Broadcom's $105 Billion Offer, What's Next?

Qualcomm’s Board of Directors rejects Broadcom's bid

Fox Business video above published Nov 13, 2017: Rosecliff CEO Mike Murphy and Kelly & Co. Managing Partner Kevin Kelly on Qualcomm's decision to reject Broadcom's bid to buy the company.

Qualcomm Rejects Broadcom's $105 Billion Offer

Bloomberg.com video above published Nov 13, 2017: Qualcomm Inc. rejected a $105 billion acquisition offer from Broadcom Ltd., setting up a proxy battle to be decided by Qualcomm shareholders. Bloomberg's Ed Hammond reports on "Bloomberg Daybreak: Americas."

Analysis: Broadcom made the unsolicited offer last week to buy Qualcomm and become the world's dominant supplier of chips used in approximately 1.5 billion smartphones expected to be sold globally this year. Broadcom has a much better relationship with Apple than Qualcomm--Apple and Qualcomm are in multiple disputes concerning royalties and other issues.

What's next? Broadcom can meet with Qualcomm and raise its bid, engage in a proxy fight, or make a hostile exchange offer.

History of the Broadcom offer:

Nov 6, 2017: Qualcomm Confirms Receipt of Unsolicited Proposal from Broadcom | Qualcomm.com: "Qualcomm Incorporated (NASDAQ: QCOM) (“Qualcomm” or the “company”) today confirmed that it has received a non-binding, unsolicited proposal from Broadcom Limited (NASDAQ: AVGO) to acquire all of the outstanding shares of Qualcomm for per share consideration of $60.00 in cash and $10.00 in Broadcom stock."

Nov 13, 2017: Qualcomm Board of Directors Unanimously Rejects Broadcom’s Unsolicited Proposal | Qualcomm.com: "Qualcomm Incorporated (NASDAQ: QCOM) (“Qualcomm” or the “Company”) today announced that its Board of Directors unanimously rejected the unsolicited proposal announced by Broadcom Limited (“Broadcom”) on November 6, 2017. “It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm Incorporated. “No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. 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 Incorporated. “The Board and Management are singularly focused on driving value for Qualcomm’s shareholders. After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty. We are highly confident that the strategy Steve and his team are executing on provides far superior value to Qualcomm shareholders than the proposed offer,” said Tom Horton, Presiding Director for Qualcomm Incorporated."

Nov 13, 2017: Broadcom Remains Fully Committed to Acquisition of Qualcomm | Broadcom.com: "Broadcom Limited (NASDAQ: AVGO) ("Broadcom"), a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets, today announced that it remains fully committed to pursuing its acquisition of Qualcomm Incorporated (NASDAQ: QCOM) ("Qualcomm"). Broadcom's offer of $70.00 per share, which consists of $60.00 in cash and $10.00 per share in Broadcom shares, represents a 28% premium over the closing price of Qualcomm's common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33% to Qualcomm's unaffected 30-day volume-weighted average price. The Broadcom proposal stands whether Qualcomm's pending acquisition of NXP Semiconductors N.V. ("NXP") is consummated on the currently disclosed terms of $110 per NXP share or is terminated. Hock Tan, President and Chief Executive Officer of Broadcom, stated, "This transaction will create a strong, global company with an impressive portfolio of industry-leading technologies and products, and we have received positive feedback from key customers about this combination. We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction. Many have expressed to us their desire that Qualcomm meet with us to discuss our proposal. It remains our strong preference to engage cooperatively with Qualcomm's Board of Directors and management team.""

NASDAQ: QCOM Monday, Nov 13, 2017, 4:53 PM EST: $66.49 UP $1.92 (+2.97%)
After-hours: 66.49  (0.00%); Mkt cap: 98.02B; P/E ratio: 40.21; Div yield: 3.43%
(source: link above)

Broadcom Ltd
NASDAQ: AVGO Monday, Nov 13, 2017, 4:45 PM EST: $265.01 UP $0.05 (0.02%)
After-hours: 265.01 (0.00%); Mkt cap: 108.12B; P/E ratio: 217.73; Div yield: 1.54%
(source: link above).

Qualcomm (domain: qualcomm.com) is a U.S.-based multinational semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services, deriving most of its revenue from chipmaking and the bulk of its profit from patent licensing businesses. The company headquarters are in San Diego, California, and the company has 224 worldwide locations. The parent company is Qualcomm Incorporated (Qualcomm), which includes the Qualcomm Technology Licensing Division (QTL). Qualcomm's wholly owned subsidiary, Qualcomm Technologies, Inc. (QTI), operates substantially all of Qualcomm's R&D activities, as well as its product and services businesses, including its semiconductor business, Qualcomm CDMA Technologies. Qualcomm has a pending acquisition of NXP and is in litigation with Apple.

Broadcom Limited (domain: broadcom.com) (formerly Avago Technologies) is a designer, developer and global supplier of products based on analog and digital semiconductor technologies within four primary markets: wired infrastructure, wireless communications, enterprise storage and industrial & others. Hock Tan is the company's president and CEO. The company is incorporated in Singapore, and is co-headquartered in San Jose, California and Singapore, but has announced plans to redomicile in the United States. Avago took the Broadcom part of the Broadcom Corporation name after acquiring it in January 2016. The ticker symbol AVGO that represented old Avago now represents the new merged entity. The Broadcom Corporation ticker symbol BRCM was retired.

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