"Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company," said Hock Tan, President and Chief Executive Officer of Broadcom at the time. "This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products."
Qualcomm has had a week to go over the proposal, and it is not impressed... at all. Qualcomm's Board of Directors unanimously rejected the proposal, saying that it undervalues the company. Qualcomm feels that its product catalog and its enviable portfolio of patents has the company poised for continued domination in the technology sector for the foreseeable future.
“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry," said Qualcomm CEO Steve Mollenkopf. "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."
In addition to "undervaluing" the company, Qualcomm also feels that the combined companies would face "significant regulatory uncertainty" that could torpedo the deal if it were to accept.
"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.
Qualcomm is currently undertaking $38 billion acquisition of NXP Semiconductors. The company is also in a bitter legal fight with Apple over hardware payments and royalty fees relating to the iPhone and iPad.