Qualcomm will reportedly reject Broadcom's offer

The source said Qualcomm's board of directors could huddle up on Sunday to examine the unsolicited acquisition bid and think of its strategy. After consulting with its financial advisors, the company concluded that Broadcom's $70-per-share proposal represents a significant undervaluation.

San Diego-based Qualcomm is going to reject a $103 billion purchase offer made by rival Broadcom, according to a Reuters report. It signals directors believe Qualcomm can boost its stock price higher than the offer of $70 a share, a 28% premium to its price November 2, before The Wall Street Journal reported the bid was imminent. Tom Horton, the company's Presiding Director of Qualcomm, Inc., also said that the uncertainty of the proposed acquisition also had something to do with the rejection.

Broadcom said Monday that it remains committed to pursuing a deal.

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Qualcomm delivers chips to carrier networks to provide broadband and mobile data. But antitrust authorities already have challenged Qualcomm's business practices in several countries, and the combined companies would hold a dominant position in the wireless industry. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds. Those concerns all came together to make Qualcomm's answer to Broadcom a big fat no, so now the ball is back in Broadcom's court. Amid all the fighting with Apple, and accompanying loss of revenue, Qualcomm's shares had fallen 20% this year through late October to $51 before rumors of Broadcom's interest leaked. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", said Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.

Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm states the following in regards to the decision taken by the chipmaker.

ZDNet has reached out to Broadcom and will update if we hear more.

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