Broadcom (AVGO) CEO Hock Tan's hostile bid for Qualcomm (QCOM) , which itself is buying NXP International (NXPI) ,  certainly does not lack for moxie.

If consummated, the deal would be the largest tech deal ever, at about $130 billion, including debt. Even so, it looks a little light on money.

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Qualcomm shareholders would collect $70 per share, $60 in cash and $10 in Broadcom shares. Shares of Qualcomm gained 1.1% to $62.50 on Monday, after gaining 12.8% Friday on reports of the offer.

"People are pretty well aware the only reason the Qualcomm stock is depressed is because of the uncertainty with what is going on with Apple (AAPL) and regulatory agencies," said Patrick Moorhead, Moor Insights & Strategy, who suggests that Qualcomm shareholders would push for a price of at least $90 per share.

Qualcomm and Apple Inc. are currently embroiled in a bitter global dispute over intellectual property from the U.S. to China. Shares of Qualcomm have suffered this year as it has warred with the iPhone maker, which accounted for nearly 20% of the chipmaker's net revenue for the fiscal quarter ended July 30, 2017, according to Qualcomm. Apple is reportedly considering whether to drop Qualcomm chips from iPhones and iPads.

"The gist of it is, this is not happening at this price," said Cody Acree of Drexel Hamilton LLC said of the transaction, suggesting that Broadcom would likely have to offer more than $80 per share to be taken seriously. Qualcomm still has dominant positions in wireless chips and in the intellectual property underlying wireless communications. At the end of last year, before its legal firestorm with Apple erupted, Qualcomm stock traded in the mid- to high-$60s.

"These legal issues tend to be transitory," noted Acree. "It make take years, but Apple and Qualcomm will come to terms and it passes. Once it does Qualcomm still has this dominant IP position."

Broadcom CEO Hock Tan has proposed combining his company, Qualcomm and NXP into one mega chip-making shop, although he indicated Broadcom would move forward with its current bid whether or not the purchase of NXP is completed. 

The benefits of rolling up both Qualcomm and NXP could be huge, as Jefferies analyst Mark Lipacis observed in a note. Even if Broadcom boosted its offer to Qualcomm to $80 per share for Qualcomm, and paid $120 per share for NXP, the acquisitions could push the company's 2018 earnings per share from $17.46 to $28.12.

Private equity firm Silver Lake will lessen the hit by contributing $5 billion in financing for the deal. The Los Angeles private equity firm previously provided $1 billion in debt financing for Broadcom's $6.6 billion purchase of LSI Corp. in 2014. Silver Lake Managing Partner Kenneth Hao sits on Broadcom's board.

Broadcom could help finance a higher takeout price by selling off some of its assets, such as WiFi and Bluetooth operations where it overlaps with Qualcomm. 

Still, though, Broadcom's timing of the deal is is odd. Broadcom is lodging a bid as Qualcomm looks to complete its own purchase of NXP for $47 billion, including debt. The deal would strengthen Qualcomm's position in chips for cars --which promise to be the ultimate mobile devices as autonomous driving and other advances in technology take hold. 

"For Qualcomm to give up its franchise and not see the benefits of this merger they've been working on for the last year, I think they would say [the value of those factors] is not reflected in this price," Acree said. 

Broadcom, NXP and Facebook is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AVGO, NXPI or FB? Learn more now.

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