Qualcomm rejects Broadcom's $130bn takeover offer

Qualcomm’s board of directors has unanimously rejected the $130bn takeover bid made by Broadcom on 6 November.

Qualcomm said the proposal “significantly undervalues” the company relative to its leadership position in mobile technology and its future growth prospects

Chief executive Steve Mollenkopf said: “No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. 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.”

Meanwhile, presiding director Tom Horton said: “The board and management are singularly focused on driving value for Qualcomm’s shareholders. After a comprehensive review, conducted in consultation with our financial and legal advisors, the board has concluded that Broadcom’s proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty. 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.”

Qualcomm confirmed earlier this month that it had received a non-binding, unsolicited proposal from Broadcom of $60.00 in cash and $10.00 in Broadcom stock per share. The proposal represented a 28% premium over the closing price of Qualcomm on 2 November, which was the last unaffected trading day prior to media speculation regarding a potential deal.

At 1440 GMT, Qualcomm shares were up 0.3% to $64.80, while Broadcom shares were down 0.9% to $262.55.