Qualcomm has rejected the latest takeover offer from Broadcom. After Broadcom raised its bid and the companies met, Qualcomm said it still thinks the offer "materially undervalues" its shares and has an "unacceptably high level of risk".
Qualcomm posted on its website a letter sent to Broadcom CEO Hock Tan with its response. The company said the meeting with Broadcom was "constructive", as Broadcom agreed to the potential sale of some activities to appease competition regulators, beyond what was disclosed in its publicly filed merger agreement. At the same time, Qualcomm said Broadcom continued to resist agreeing to other commitments that could be expected to be required by the FTC, the European Commission, MOFCOM and other government regulatory bodies.
Broadcom also declined to respond to any questions about its intentions for the future of Qualcomm’s licensing business, which Qualcomm said "makes it very difficult to predict the antitrust-related remedies that might be required". In addition, Broadcom insisted on controlling all material decisions about the licensing business during the period between signing and a potential closing of the merger, which "would be problematic and not permitted under antitrust laws", Qualcomm said.
Finally, Qualcomm rejected the break-up fee proposed by Broadcom, saying this "does not come close to compensating" its shareholders for the risks involved in completing the deal.
Nevertheless, Qualcomm said it was open to further talks with Broadcom, despite the latter saying this was its "best and final" offer.
