Qualcomm Board Unanimously Rejects Broadcom's $121 Billion Offer

The Board of Directors of Qualcomm Incorporated issued a letter to Broadcom Limited after their meeting on February 14, 2018. In the letter they tell Broadcomm, that the acquisition offer undervalues Qualcomm and they will not be accepting this offer. On Feb 7, Broadcom raised their acquisition offer to $82 per share i.e. $121 Billion from $100 Billion which was offered eariler. The letter from Paul E. Jacobs, that Chairman of the board to Hock Tan, the CEO of Broadcom, can be seen below:

February 16, 2018

Mr. Hock Tan
President and Chief Executive Officer
Broadcom Limited
1 Yishun Avenue 7
Singapore 768923

Dear Mr. Tan,

I am writing on behalf of the Board of Directors of Qualcomm Incorporated.  In our February 14 meeting, Broadcom reiterated that $82.00 per share is its best and final proposal. The Board remains unanimously of the view that this proposal materially undervalues Qualcomm and has an unacceptably high level of risk, and therefore is not in the best interests of Qualcomm stockholders. 

That said, our Board found the meeting to be constructive in that the Broadcom representatives expressed a willingness to agree to certain potential antitrust-related divestitures beyond those contained in your publicly filed merger agreement.  At the same time, Broadcom continued to resist agreeing to other commitments that could be expected to be required by the FTC, the European Commission, MOFCOM and other government regulatory bodies. Broadcom also declined to respond to any questions about its intentions for the future of Qualcomm’s licensing business, which makes it very difficult to predict the antitrust-related remedies that might be required.  In addition, Broadcom insists on controlling all material decisions regarding our valuable licensing business during the extended period between signing and a potential closing, which would be problematic and not permitted under antitrust laws.

Our Board is highly cognizant of the need to protect Qualcomm’s stockholders from the considerable risks of agreeing to a transaction that does not close.  A breakup fee in the range proposed by Broadcom does not come close to compensating for those risks.

While the current Broadcom proposal is unacceptable, our Board is intensely focused on maximizing value for Qualcomm stockholders, whether through executing on its growth strategy or by selling the Company. Our Board is open to further discussions with Broadcom to see if a proposal that appropriately reflects the true value of Qualcomm shares, and ensures an appropriate level of deal certainty, can be obtained. If such a proposal cannot be obtained from Broadcom, our Board is highly confident in Qualcomm’s ability to deliver superior near- and long-term value to its stockholders by continuing to execute its growth strategy.

Sincerely,

Paul E. Jacobs
Chairman of the Board

Here is a timeline of the Qualcomm/Broadcom Saga

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