Broadcom made an unsolicited bid last week to buy Qualcomm in an effort to become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year.
Qualcomm Chief Executive Steven Mollenkopf has spent the past few days soliciting feedback from Qualcomm shareholders, and feels that Broadcom's $70-per-share bid undervalues the company and does not price in the uncertainty associated with getting the deal approved by regulators, according to the sources.
On Monday, Qualcomm said in a press release that the San Diego, Calif. -based company's Board of Directors has unanimously rejected the proposed deal.
Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle. That's all without touching on Qualcomm's current legal spat with Apple, too, which might throw a wrench into some of these plans. Its own board similarly thinks that the offer undervalues the company and NXPs shares were trading above Qualcomms offer. The $105 billion bid does sound a lot but bear in mind that Nvidia's market cap is about $130 billion dollars, a product of great stock performance, but honestly, Qualcomm's portfolio seems broader and shows more potential on the long run. Qualcomm and Broadcom did not immediately respond to requests for comment. They've said they're still committed to merging the companies, which might mean we'll see a significantly larger offer or some other more aggressive tactics.
Qualcomm provides chips to carrier networks to deliver broadband and mobile data.
Meanwhile, Qualcomm is trying to acquire NXP for $38 billion but NXPs shareholders are reluctant.
The right price for Qualcomm could be between $80 and $85 per share, and Broadcom could go up to $90, Susquehanna analyst Christopher Rolland told Reuters. The per share consideration would consist of $60.00 in cash and $10.00 per share in Broadcom shares.