Qualcomm rejects Broadcom's latest acquisition proposal

Qualcomm chairman asks Broadcom if it's the best offer they have

After months of to-and-fro, Qualcomm has rejected Broadcom's latest acquisition proposal, which has beendescribed as its "best and final offer".

The chip giant'sboard of directors unanimously rejected the proposal toacquire all of the firm's outstanding shares for $82 per share, which breaks down to $60.00 in cash and $22 in Broadcom stock.

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A letter from Qualcomm chairman Paul Jacobs addressed to Broadcom CEO Hock Tan, details the decision.

"The Board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction," it states.

However, Jacobs didn't completely disregard any prospect of a deal, and added that the Qualcomm board would be open to meeting with Broadcom to explore "all options for maximising shareholder value". However, he reiterated that Broadcom's proposal is "inferior" in relation to what Qualcomm expects as an independent company.

He also hinted at whether $82 per share is really Broadcom's highest offer, and how close Broadcom is to achieving a deal.

The news of the rejected offer comes just as Qualcomm announces acomprehensive list of hardware manufacturers and network operators that are on-board with its 5G launch aims, withthe likes of Asus, Nokia, HTC, LG, OnePlus, Sony, Xiaomi and ZTE all game. Everyone but Samsung, it seems. Probably because the Korean phone giant is looking to go solo and be the first to launch 5G on its flagship devices.

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01/02/2018:Qualcomm and Samsung strike deal to end interventions in 600m South Korean antitrust case

Qualcomm has struck a new deal with Samsung which could help the mobile chip firm wave goodbye to its antitrust case in South Korea.

The agreement, which covers mobile devices and infrastructure equipment, will also see Samsung withdrawing its interventions in Qualcomm's appeal of the Korean Fair Trade Commission's (KFTC) 2016 decision to issue a whopping $868 million (610 million) fine over what was then labelled "excessive" licensing fees.

While Qualcomm did not disclose terms of the amended deal, it said it was "consistent" with its "global handset-level" pricing.

"Qualcomm has enjoyed a strong partnership with Samsung for many years, and we are pleased to further strengthen and extend our relationship through this amended cross-license agreement, alongside our continuing relationship as a key product supplier to Samsung," said the firm's CEO, Steve Mollenkopf.

"We believe this amended agreement provides the foundation for a long-term, stable relationship with Samsung following the KFTC investigation," added Qualcomm's executive VP and president of its licensing tech arm, Alex Rogers.

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"With our portfolio of leading technology inventions, we are committed to driving growth for the global ecosystem and we look forward to an expanded business relationship with Samsung."

The two companies also said they plan to work together on a "multiyear strategic relationship" for Qualcomm'schips that will aid the "transition to 5G".

According to the FT, the deal will also likely fend off a hostile takeover bid from semiconductor giant Broadcom.

Over the last year, Broadcom has been applying pressure on Qualcomm to accept its takeover bid. In late 2017, the company planned to nominate 11 directors for election to Qualcomm's board and put forward "certain other matters for the consideration of Qualcomm stockholders" at the company's 2018 annual stockholder meeting.

More recently, it's been reported that Broadcom is planning a higher bid. On Tuesday, RBC Capital Markets's analyst Amit Daryanani said he sees "increasing probability that AVGO [Broadcom] will submit a higher offer" ahead of Qualcomm's shareholder meeting on 6 March.

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