SAN DIEGO — The board of directors of San Diego-based Qualcomm Inc. has unanimously rejected a more than $100 billion unsolicited takeover bid by electronics company Broadcom Ltd., Qualcomm said Monday.
“It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects,” said Qualcomm Executive Chairman and Chairman of the Board Paul Jacobs.
Last Monday, Singapore-based Broadcom offered more than $100 billion — estimates ranged between $103 and $130 billion — in an unsolicited takeover bid that would have been the richest deal ever in the electronics industry.
“This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products,” Broadcom CEO Hock Tan said in a statement last week. “We would not make this offer if we were not confident that our common global customers would embrace the proposed combination.”
But Qualcomm executives said the proposed takeover for $70 per share “dramatically undervalues” the San Diego-based company, which is the world’s largest maker of mobile phone chips.
“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,” said Qualcomm Presiding Director Tom Horton. “We are highly confident that the strategy (CEO Steve Mollenkopf) and his team are executing provides far superior value to Qualcomm shareholders than the proposed offer.”
Buying Qualcomm would have made Broadcom the third-largest electronics chip-maker behind Intel Corp. and Samsung Electronics Co., Bloomberg reported last week. The combined business would have become the default provider of a set of components needed to build each of the more than one billion smartphones sold every year, according to Bloomberg.