Qualcomm (QCOM) and Broadcom (AVGO) may seem like a perfect match, but the former won't settle for just any old offer. It told Broadcom to take a hike with its $70 per share bid. Qualcomm stock closed higher almost 3% on the news Monday. Shares are still climbing Tuesday, up 5 cents to $66.54 in morning trade, after gaining roughly 26% over the past month.

With Qualcomm officially rejecting the deal, that got the conversation rolling on what type of offer management would accept. After all, everyone's got their price, right?

While $70 per share wasn't appealing enough, Nomura Instinet's Romit Shah says an offer of $80 or more per share would be "highly compelling" to some of Qualcomm's larger shareholders.

While $70 per share wasn't appealing enough, Nomura Instinet's Romit Shah says an offer of $80 or more per share would be "highly compelling" to some of Qualcomm's larger shareholders.

The $10 per share increase (at a minimum) would represent a 14.3% bump to the overall offer. Considering that the original offer represented a deal worth roughly $103 billion and you get a sense at just how large of an increase this would equate to. It would push the total deal to $117.7 billion, an increase of nearly $15 billion.

This is no drop in the bucket.


Despite Qualcomm's seemingly powerful position to sweeten the pot -- remember, it has a market cap near $100 billion already -- Broadcom has leverage too, Shah reasoned. Adding to that, he said Broadcom has more upside should it seal a deal for Qualcomm. He argues that the stock could rally 35% to $360.

Further, Michael Walkley of Canaccord upped his price target to $83 from $76 after the Qualcomm board of directors unanimously rejected Broadcom's offer. He argues that Broadcom will likely raise its offer and he's confident Qualcomm can resolve some of its licensing issues. Walkley maintains his buy rating, while a move to $83 per share would represent a near-25% boost.

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

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

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