Qualcomm lined up a meeting with Broadcom on 14 February to discuss a proposed takeover face-to-face for the first time.
The showdown comes a week after Broadcom sweetened its takeover bid from $70 per share to $82 per share and made other concessions including offering to pay Qualcomm a break-fee of $8 billion should the deal be rejected by antitrust regulators.
Qualcomm’s board of directors swiftly rejected the improved bid, but offered to meet with Broadcom to address lingering questions around the proposal. Broadcom initially requested a meeting over the weekend, but subsequently agreed to the later date, Reuters reported. Details of the meeting are not yet public.
As with Broadcom’s original bid, launched in November 2017, Qualcomm’s board of directors concluded the improved offer (which Financial Times said totalled $146 billion) undervalues the company and falls short of what it would require should the deal fail to receive the appropriate regulatory approvals.
Customers wary
Despite Qualcomm suggesting a meeting with Broadcom, its stance around a potential deal doesn’t appear to have changed.
After rejecting the improved bid, it issued a note warning shareholders its customers are wary of a potential Broadcom takeover, stating two major clients have already threatened to withdraw their business if a deal is reached.
The company added a number of its customers share concerns and pointed out a handful of Chinese vendors have already publicly voiced their opposition.
A meeting is the latest in an ongoing saga between the companies. After the initial $70 per share bid was rejected, the takeover turned hostile when Broadcom and its affiliates nominated 11 candidates for election to Qualcomm’s board and contacted the company’s shareholders directly urging them to back the proposed takeover.
Qualcomm is due to hold its annual shareholder meeting on 6 March.
Notably, if a deal is eventually thrashed out, it will face a number of regulatory hurdles given Qualcomm and Broadcom compete in a number of overlapping areas.
Qualcomm also argues a projected approval process of more than 18 months would disrupt its business at a critical time for the company, amid ongoing work around 5G, IoT and autonomous driving technology.
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