Qualcomm rejects new bid from Broadcom
In a letter from Qualcomm Chairman Paul Jacobs to Broadcom president and CEO Hock Tan, Jacobs wrote that Qualcomm has offered to meet with Broadcom to "address the serious deficiencies in value and certainty in its proposal." However, Broadcom has said that the $82 a share bid is its "best and final offer." Qualcomm says that the bid does not take into account its purchase of NXP Semiconductors NV for $38 billion. That transaction needs only one more regulatory approval (from China) to close.
Speaking of regulatory approval, Qualcomm's letter asks Broadcom if it is willing to take whatever actions are required to close the transaction. Qualcomm's Jacobs notes in his missive, that if his company agrees to be purchased by Broadcom and U.S. regulatory agencies block the deal from going through "Qualcomm would be enormously and irreparably damaged." Broadcomm's last offer contained a higher than normal break up fee that would be paid to the San Diego based chipmaker if a signed deal is quashed by the FTC, or other agencies that are part of the regulatory alphabet soup in the states.
Broadcom could continue its attempt to replace Qualcomm's 11 board members with its own directors. A proxy fight would allow Qualcomm stockholders to toss the current board and vote for Broadcom's candidates, who would then vote to accept the $82 deal. Of course, that could be avoided if Broadcom meets with Qualcomm and both agree on a price.