When will this back and forth end?
Another day, another possibility that Qualcomm may eventually sell to Broadcom.
Reports of Broadcom being interested in acquiring Qualcomm first appeared in early November of 2017, but Qualcomm's Board of Directors turned down the initial offering of $105 billion. Broadcom came back with a counter-offer of $121 billion, but even so, Qualcomm still refused to sell.
On February 16, 2018, Qualcomm's Chairman of the Board, Paul Jacobs, sent a letter to Broadcom President and CEO, Hock Tan, that essentially says Qualcomm remains open to a buyout if Broadcom is willing to offer more money.
The letter starts out with Jacobs saying:
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.
However, this is later followed up with the most worrisome part of the letter:
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.
Will Broadcom keep offering Qualcomm cash until a deal goes through? That remains to be seen. Broadcom's last offer of $121 billion was supposedly its final one, but it's been awfully adamant about buying Qualcomm for a few months now. Jacobs does say in the letter that the Board is "highly confident in Qualcomm's ability to deliver a superior near- and long-term value to its stockholders" if an agreement can't be reached, but the sheer fact that Qualcomm isn't completely turning Broadcom down leaves me worried that something could still happen between the two.
Once again, it continues to be a matter of wait and see.
Broadcom buying Qualcomm could grind innovation to a screeching halt
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