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Qualcomm gears up to fight Broadcom

by on13 November 2017

Hostile take-over

Qualcomm is drawing up its battle plans to fight off a hostile takeover from Broadcom.

The outfit is certain to reject rival Broadcom $103 billion bid as early as this week which would set the stage for one of the IT industry’s biggest ever takeover battles.

Qualcomm’s board of directors could meet as early as Sunday to review the unsolicited acquisition offer and decide on its strategy, the sources said. The preparations for the board meeting indicate that Qualcomm is poised to rebuff the bid as too low, although it may decide to spend a few more days this week to prepare its full response to Broadcom.

Qualcomm Chief Executive Steven Mollenkopf has spent the past few days soliciting feedback from Qualcomm shareholders, and feels that Broadcom’s $70-per-share bid undervalues the company and does not factor in any uncertainty associated with getting the deal approved by regulators.

Antitrust watchdogs are not going to be happy with the deal and are almost certain to demand that Qualcomm or Broadcom flog off some of their businesses first. China almost certain to demand that the chipmakers hand over technology licences so that it its home grown industries can complete with the new super-company.

Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle.

The sources said Broadcom was preparing to submit a slate of directors by Qualcomm’s December 8 nomination deadline. That would allow Qualcomm shareholders to vote to replace the company’s board and force it to engage with Broadcom.

Broadcom has also been deliberating the possibility of raising its bid for Qualcomm, including through more debt financing, some of the sources said, although it was not clear when Broadcom would choose to make such a move.

Last modified on 13 November 2017
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